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FX Interventions, Aussie & Gold
ECB Intervention is inevitable, Gold set to catch down with other commodities & Aussie to way down under
But Mr. Ashraf, the declines in gold, you see the continued rise of euro against the dollar in case of gold continued to fall
Where do you see the euro in the short term?
nader gaith
regard
Alternative scenario: Below 0.821 look for further downside with 0.807 & 0.7905 as targets.
Comment: the RSI is mixed and calls for caution.
Key levels
0.859
0.85
0.837
0.8226 last
0.821
0.807
0.7905
Whilst some blame todays move on the RBA checking prices in the Asian morning rubbish the real culprit remains risk deduction. AUD/USD positions were extended across the board. AUD/JPY fell 8% at one stage yesterday and ricochet back over 4% today. Ditto EUR/AUD.
Option players say players are covering themselves through the options market and paying up to 25% for volatilty which can normally be purchased for less than half that price.
I dont have a firm on where it is headed but I would be a seller on rallies near 84 cents on the expectation that a move to 85 cents would see the topside out.
China may stop their tightening policy
I have shorted AUD/JPY from your anaylsis, this is quite similar to the subprime crisis period. S&P also cracked 200ema, which forecasts major crash in stock market, thus we would expect more carry trade unwings.
Heavy, heavy buying in odd-ball crosses like EUR/AUD and EUR/NOK as well as the big intervention in EUR/CHF this week should help alleviate some fear the market is just too short of EUR to go any lower. The move came fairly late in the week, so it may not show up in the IMM data to be released tomorrow, but the buying should have made a dent. Keep that in mind
EUR/USD is consolidating around 1.2380.
SD/JPY is coming back after it hit an air-pocked below 90.00 earlier in the session, tumbling to 88.95 in no time flat. Global markets have steadied a bit after plunging earlier in the US morning. The S&P fell over 3% and is now down 2.3%. European markets just closed down 2.3%.
EUR/JPY has recovered to 111.65 from 109.47 panic lows. EUR/USD is firmer in its range, now at 1.2380. 1.2445/55 remains hugely important resistance.
(RTTNews) - The European Central Bank will fully absorb the liquidity infused through ECBs government bond purchasing program through tenders of term deposits, ECB President Jean-Claude Trichet said on Thursday.
Speaking at the colloquium in honor of the central banks vice president Lucas Papademos, Trichet also assured the ECBs present monetary policy stance is appropriate and has been validated by the May 9 decision to snap up bonds to prevent a run on the euro.
We are not engaging in any form of quantitative easing, Trichet said.
The Securities Markets Program is designed to ensure an effective functioning of the monetary policy transmission mechanism by helping to resolve a malfunctioning of some segments of the euro area debt securities markets, he noted.
Recently, the Frankfurt-based central bank said in a statement that it decided to buy government and private bonds to ensure depth and liquidity in those market segments which are dysfunctional.
Trichet noted that building a safer financial system is of paramount importance that the responsible authorities enhance their financial sector surveillance while at the same time financial institutions play a decisive role by enhancing their risk management practices.
In this context, a key initiative is the proposal for the establishment of a European Systemic Risk Board or ESRB, which will be supported analytically and logistically by the ECB.
The ESRB will be an independent body responsible for conducting macro-prudential oversight of the EUs financial system as a whole, he said.
Once the legislative process is completed, the creation of this new European policy function will fill a significant gap in the ability to detect, assess and ultimately contain the build-up of risks.
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Copyright(c) 2010 RTTNews.com, Inc. All Rights Reserved
For those who are amazed today with EURAUD have another look at EURNOK. Cash is rising people!!!
Game play, Buy CAD vs AUD. It's become a bearish world for AUD with soaring risk aversion, falling commodity prices, a pause in the monetary tightening cycle, softer monthly economic indicators and political uncertainties, says BBH. Rising risk aversion and lower commodity prices are not good news for CAD either, but many other bullish forces remain in place at this point, including a favorable growth environment and data that have tended to surprise to the upside. Also, it's only a matter of time before the Bank of Canada enters into a rate normalisation process, BBH adds. With AUD/CAD around 87.69, bounces back towards 0.90 are good selling opportunities, BBH says.