Wednesday, October 24, 2007

Where do we go from here?

The AUD powered up against the USD and made the 9000 level quite easily in the end with not a lot of volatility along the way, personally I’m out at 9004, having decided that once the price got to 9000 it would punch through quite quickly, I didn’t expect it to run so hard once it got there. Can’t say I’m unhappy with the trade though, up almost 200 points in a few days. I am bearish the USD on a long term fundamental basis and believe that there will be excellent opportunities shorting the North American Peso in the coming weeks. I think there is potentially a trade of going long some low inflation, low yielding JPY against the USD and waiting for the carry trade to blow up in a big way, but I don’t think the market is signalling an attractive entry point at present. I will be keeping an eye on the EURUSD, the GBPUSD, the USDJPY and the AUDUSD and I’ll let you know when I think it’s time to pounce.

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