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Jay Norris
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Jay Norris is a 20-year CBOT floor veteran, author of the Best Seller "The Secret to Trading Forex, Futures, and ETFs: Risk Tolerance Threshold Theory", "Mastering the Currency Market", McGraw-Hill, 2009, and "Mastering Trade Selection and Management", McGraw-Hill,... More
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The Secret to Trading Forex, Futures, and ETF's: Risk Tolerance Threshold
  • Does AUDUSD April Seasonal Spell Break-Out? 4 comments
    Mar 28, 2013 7:13 PM | about stocks: FXA

    Coming out of February, the Aussie was trading below 1.02 and looked to be ready to test 1.00. That changed however when the Euro shifted lower on the troubles in Cyprus. Rather than fall along with the Euro on U.S. Dollar strength, and the flight to quality from Cyprus, the Aussie rose steadily against the Greenback and other major currencies. Despite repeated long-term forecasts of lower prices by dealers including Goldman Sachs, AUDUSD reversed its Day to Day trend back higher in mid-March and is now within 20 pips of its 6-month high settlement. So where will it go next?

    (click to enlarge)
    Figure 1. Weekly AUDUSD Chart

    Looking back over the left side of the chart we might think that the Aussie would just continue to slide along in the current 8-month range between 1.01 and 1.06 - see the weekly chart in Figure 1.

    (click to enlarge)
    Figure 2. Australian Dollar Seasonal Chart

    On the other hand, the Aussie has a powerful bullish seasonal for the month of April - see Figure 2 --and that, coupled with its new found flight to quality status against the Euro, could spell still higher prices headed into the spring.

    Jay Norris is the author of The Secret to Trading: Risk Tolerance Threshold Theory and Mastering the Currency Market, McGraw-Hill, 2009. To see Jay highlight trade set-ups and signals in live markets for free go to Live Market Analysis

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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Comments (4)
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  • Kangiwa
    , contributor
    Comments (18) | Send Message
     
    New Zealand and Australia will be impacted by having currencies stronger than they normally are, and will be that way persistently. I believe the Australian dollar will rise against the greenback by the most in nine months.
    31 Mar 2013, 10:26 PM Reply Like
  • Jay Norris
    , contributor
    Comments (218) | Send Message
     
    Author’s reply » Hi Kangiwa,
    I agree
    2 Apr 2013, 06:52 AM Reply Like
  • kevinbantz
    , contributor
    Comments (3) | Send Message
     
    I think AUD and NZD are going to follow gold and silver lower, isn't steel prices like 80% off their highs? I'm looking for AUDUSD .95 this year.
    2 Apr 2013, 07:14 PM Reply Like
  • Jay Norris
    , contributor
    Comments (218) | Send Message
     
    Author’s reply » Hi Kevin,
    Very tough business participating in counter-trend trades. Better to lose one's opinion not their money. IN early March we were taking sell signals in Aussie, now we are taking buy signals...not sentimental about either side...
    3 Apr 2013, 07:45 AM Reply Like
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