Texas Trade Report Daily Report For 13 January 2014

Good Morning, Good Afternoon or Good Evening where ever you are in the world. This is Texas Trade Report for 13 January 2014. I am Liz S, your currency analyst for this daily edition.  I will be talking about the AUD/USD, NZD/USD, and USD/CAD currency pairs in this daily report. This is sole focus of this report.  Before I can go any further, here is the risk disclaimer.

Risk Disclaimer:
  Trading Forex is a risky business and sometimes you will lose the money that you traded. You are leveraged 50:1 or even more. There is the risk of loss of the money have invested. Never invest money that you are not committed losing. There is a possibility of losing your original investment. If you are not sure about investing, seek the help of registered investment adviser.

Also, the purpose of this trading lesson is education. This does not constitute trading advice. Nor do I give out trading signals. All opinions are my own and not Blogger.com nor Google.com.

AUD/USD Daily Chart

Onto the AUD/USD, this pair has gone up a bit more to 0.9090 and is currently trading at 0.9056. This pair made a high of 0.9090. The fib levels are for 23.6% at 0.9047 and the 38.2% fib level at 0.9180 on the daily chart. At the 50.0% fib level is 0.9292 and at the 61.8% fib level at 0.9403. We do see the uptick and buying interest in the Aussie. The Aussie does mirror its pricing movements like gold. We are seeing more speculative buying interest taking place. The Aussie has been oversold very aggressively against the USD. We do see that the results from NFP take hold and put the USD under selling pressure. We are seeing that investors are not buying the US treasury 3 month and 6 month bonds,

AUD/USD 30 M Chart

On the 30 minute chart is one my favorite time frame for more short term trading. We can see that the Aussie still on an uptick and some minor dips down. It appears that is on track to touch the daily fib levels. We can see this with touching the Bollinger bands.  The poor employment data from Friday and the poor US Treasury bond auction results do influence monetary policy by the Fed. I am going post the results of the 3 month and 6 month US bond auction. This gives a signal what is happening.

This is results of US Treasury Bonds at 16:30, 13 January 2014 as of today and from FX Street’s economic calendar:

                                                                     Actual                Previous

16:30          US  USD  6-Month Bill Auction             0.055%              0.080%             

16:30          US  USD  3-Month Bill Auction             0.035%              0.055%

We are bullish at this point and time.

NZD/USD Daily Chart

Onto the NZD/USD, this pair continues to trend up and is currently trading at 0.8383. This pair made a high of 0.8387. The fib levels are for 23.6% at 0.7884 and 38.2% fib level at 0.8008 on the daily chart. At 50.0% fib level is 0.8109 and at 61.8% fib level at 0.8214. The overall data is mixed. Many traders and analysts are ignoring the bond auctions. We need to have this data because people who hold US treasuries are the ones who will invest in the US. They expect a return that is reasonable. Also, the USD is under pressure due the poor employment data from Friday and the recent bond auction numbers. While budget numbers are in the positive, we have a muddle picture.

NZD/USD 30M Chart

On the 30 minute time frame, we can see evidence to support the idea of the pair being and remain bullish with some minor dips. It has maintained the bullish trend as you can see.

We do expect that the RBNZ will in fact raise interest rates and have maintained a quite hawkish tone. Any effect of the taper could be washed out. The effects of the taper could be smaller unlike the British pound or Aussie or Euro. We have seen the Kiwi become very resilient even with the threat of taper. We will see that more hot money could flow into the New Zealand economy due to interest rate hike speculation. The Kiwi tends to be a sleeper currency that not many pay attention to. The Kiwi does look interesting and bullish overall. I am bullish on this pair going forward. We could see some minor pullback. It is unlikely we will major pullbacks like we did last year.

USD/CAD Daily Chart

Onto the USD/CAD, this pair has been trending up and is currently trading at 1.0853. This pair made a high of 1.0924. The fib levels are for the 23.6% at 1.0304 and  the 38.2% fib level at 1.0414 on the daily chart. At the 50.0% fib level is 1.0498 and at the 61.8% fib level at 1.0589. We got poor data out of both countries. The results have become a wash. We do possibly see a pullback in the pair and has become overbought on the daily time frame. We can see evidence today that it does want to go down. It does appear on the daily to be overbought. We do see that it might to do a retest of the high that it posted on Friday.

USD/CAD 30M Chart

On the 30 minute chart, we can see that it will try for a re-test of the high that it made on Friday. This pair has been in a long term up trend for a while. However, the poor NFP results and US bond auction for the 3 month and 6 month can spell trouble. With not a lot of interested buyers, it would be hard to make the case for further upswing. The Fed does have interest in the employment data and the bond auction numbers that are good. The bond auction tells if investors do have interest in buying the bonds. Poor data could hinder the ability to find more speculative interest. Moreover, we do expect that Fed will begin to taper this year. We do expect that if more bad comes that it will be harder to make that case. If the data comes in worse than expected, we could see large institutional investors and firms will begin to make the case of questioning the dollar’s reserve and safe haven status. Also, it is important to take note of the political landscape and their attitude about the debt that is exceeding large. We are slightly bearish for now.

The markets are taking in the results from Friday and some of the data from today. However, we should not look at things with rose color glasses. It is very easy to become distracted and count the chickens before they hatch. This is what I am very realistic and believe that expectation have to match the reality. I do believe that with hoopla being played out that we still to be cautious and not get swept up in it. Thus, it is best not to get caught up in it.

We do notice that there were low levels of volatility and traders and investors were more willing to take those risks to due to the Christmas holidays. December tends to produce that low reading of volatility. When markets get too quiet can signal that big more volatile swings are on the horizon. We do see when many analysts and traders become euphoric can take huge risks and signal reversals. When we get pairs that become oversold, we can expect reversals like we saw the Aussie. We could see a reversal in the commodity block currencies. We do see more interest now and the market knows that they have been oversold for a long time. But, those themes are going resume their risk bearings. We will see this play out and it will happen. Lastly, I think what we are seeing some signs of reversal and with some minor dips in the commodity block and may continue for a little while longer and not permanently.

Also, I will donating some of the commissions as an affiliate from the products and service anyone buys from this website to the local charities especially be donating my profits to help out the food banks and local charities that work with needy families. For example, this means if you buy gold and silver from Regal Assets, I will donate 10% of my sales commissions as an affiliate spokesperson. I will put out another report on Sunday. Have a great day and good luck trading for the rest of today.

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