Aussie Gold
Posted on March 5, 2008
Filed Under AUD/USD |
One of my regular readers Sol has asked my opinion on the Aussie dollar and in particular my views of trading the aussie yen. Having looked at the chart for this pair I would personally concentrate my trading efforts on the aussie dollar for the reasons mentioned in previous posts, ie chronic dollar weakness, increasing gold prices and increasingly high prices in soft commodities, such as wheat. Although we tend to think of Australia as one of the world’s leading producers of precious metals such as gold it is also a major supplier of wheat, whose price has recently skyrocketed.
Although the pair has fallen back from a lifetime high of .95 because the RBA may pause in raising interest rates. Any dip back down to 0.9250 should be seen as a buying opportunity for another run back up to 0.95 and beyond.
Trading and investing in the soft commodities has recently taken the market by storm but, as usual, most of the players have arrived much too late.
Comments
One Response to “Aussie Gold”
Leave a Reply
Thanks much Anna!
Well even though I went long AUD:YEN before and after the RBS announcement I was too chicken to hold outright and hedged with short EUR:YEN. It was profitable by averaging down and up simultaneously. I have a hard time trusting the market makers as they seem to move against my positions no matter what’s going on in the market, thus I hedge so.
I think the carry interest differential between the AUD:YEN is what attracts me, but it’s so erratic.
Is that what you saw on the chart vs the AUD:US?
I’m following your AUD:US advice on a pullback this time. Regardless if I win or lose, I appreciate your thoughts.