FX Talking Points: Slow & Deliberate
By Dave Floyd   
February 02, 2010
Share

The big news overnight was that the RBA (Reserve Bank of Australia) did not hike rates as expected. AUD/USD was promptly sold off by 100+ pips but has since begun to recover some of those losses. However, unless prices are able to get back above .8834/70 this push higher is likely to fail and a break back below .8777 is in the cards.

AUD/USD 15-min chart
Click on image to enlarge!


Meanwhile, the forecast laid out on Friday and again yesterday AM remains unchanged: weaker DXC (Dollar Index). Clients who are comfortable managing their own trades may already be or perhaps consider longs in EUR/USD & NZD/USD or shorts in USD/CHF.

DXC 60-min chart
Click on image to enlarge!


Always remember the relationship between DXC and the major FX pairs:

DXC - negative correlation
Click on image to enlarge!


DXC - positive correlation
Click on image to enlarge!


With the Non-Farm Payrolls (NFP) on Friday the markets may be a bit quiet albeit directional for the next few days. Patience will be rewarded.

For more from Dave, visit Aspen Trading for more updates.
 
This website is for educational purposes only. Futures, options, and spot currency trading have large potential risk and traders should be well-educated before putting real money at risk. You must be aware of the risks and willing to accept them in order to invest in all markets. Don't trade with money you can't afford to lose. This website is neither a solicitation nor an offer to buy/sell a futures contract or currency.