{"id":17349,"date":"2013-05-13T02:04:20","date_gmt":"2013-05-13T09:04:20","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=17349"},"modified":"2013-05-13T02:04:20","modified_gmt":"2013-05-13T09:04:20","slug":"week-of-major-currency-shifts-flips-me-bullish-australian-and-british-currencies","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2013\/05\/13\/week-of-major-currency-shifts-flips-me-bullish-australian-and-british-currencies\/","title":{"rendered":"Week of Major Currency Shifts Flips Me Bullish Australian and British Currencies"},"content":{"rendered":"<p><strong>(This is an excerpt from an article I originally published on Seeking Alpha on April 7, 2013. <a href=\"http:\/\/seekingalpha.com\/article\/1325091-week-of-major-currency-shifts-flips-me-bullish-australian-and-british-currencies\" target=\"_blank\">Click here to read the entire piece<\/a>.)<\/strong><\/p>\n<p>{snip}<\/p>\n<p>The market seemed to convulse on the notion that the Fed could actually end asset purchases but seemed to ignore the conditional of a much improved labor market and improving economy. Moreover, Williams did not express certainty, he expressed <strong>hope<\/strong>. In fact, Williams went to great pains to remain consistent with standing policy and highlighted that the Federal Reserve will remain in a very accomodative stance for quite some time. {snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_17352\" aria-describedby=\"caption-attachment-17352\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_SP500.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_SP500.png\" alt=\"The S&amp;P 500&#039;s churn continues as it bounces nicely off the lower-BB\" title=\"The S&amp;P 500&#039;s churn continues as it bounces nicely off the lower-BB\" width=\"500\" height=\"350\" class=\"size-full wp-image-17352\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_SP500.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_SP500-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-17352\" class=\"wp-caption-text\">The S&P 500&#039;s churn continues as it bounces nicely off the lower-BB<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>{snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_17369\" aria-describedby=\"caption-attachment-17369\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_DXY0.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_DXY0.png\" alt=\"After finally breaking away from its QE3 price, the dollar index ran into a brick wall at its QE2 price\" title=\"After finally breaking away from its QE3 price, the dollar index ran into a brick wall at its QE2 price\" width=\"500\" height=\"350\" class=\"size-full wp-image-17369\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_DXY0.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_DXY0-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-17369\" class=\"wp-caption-text\">After finally breaking away from its QE3 price, the dollar index ran into a brick wall at its QE2 price<\/figcaption><\/figure><br \/>\n<br \/>\n<figure id=\"attachment_17370\" aria-describedby=\"caption-attachment-17370\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_DXY0-weekly.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_DXY0-weekly.png\" alt=\"QE3 could not contain the dollar, but QE2 continues to do so\" title=\"QE3 could not contain the dollar, but QE2 continues to do so\" width=\"500\" height=\"350\" class=\"size-full wp-image-17370\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_DXY0-weekly.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_DXY0-weekly-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-17370\" class=\"wp-caption-text\">QE3 could not contain the dollar, but QE2 continues to do so<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>{snip}<\/p>\n<p><strong>Australian dollar<\/strong><br \/>\nI covered the latest decision on monetary policy several days ago (see &#8220;<a href=\"http:\/\/seekingalpha.com\/article\/1319421-the-reserve-bank-of-australia-marginally-concedes-to-a-brighter-outlook\" target=\"_blank\">The Reserve Bank Of Australia Marginally Concedes To A Brighter Outlook<\/a>&#8220;). At the time, I stubbornly decided to hold onto my short Aussie bias with my short AUD\/USD position given my expectation that resistance at the long-standing downtrend line would hold. I was rewarded but in a very unexpected way.<\/p>\n<p>{snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_17376\" aria-describedby=\"caption-attachment-17376\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_AUDJPY.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_AUDJPY.png\" alt=\"AUD\/JPY crosses 100 for the first time since the month before Lehman Brothers collapsed\" title=\"AUD\/JPY crosses 100 for the first time since the month before Lehman Brothers collapsed\" width=\"500\" height=\"350\" class=\"size-full wp-image-17376\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_AUDJPY.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_AUDJPY-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-17376\" class=\"wp-caption-text\">AUD\/JPY crosses 100 for the first time since the month before Lehman Brothers collapsed<\/figcaption><\/figure><br \/>\n<br \/>\n<figure id=\"attachment_17378\" aria-describedby=\"caption-attachment-17378\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_AUDUSD.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_AUDUSD.png\" alt=\"...but AUD\/USD further retreated from resistance at the downtrend line\" title=\"...but AUD\/USD further retreated from resistance at the downtrend line\" width=\"500\" height=\"350\" class=\"size-full wp-image-17378\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_AUDUSD.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_AUDUSD-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-17378\" class=\"wp-caption-text\">...but AUD\/USD further retreated from resistance at the downtrend line<\/figcaption><\/figure><br \/>\n<br \/>\n<\/center><\/p>\n<p>{snip}<\/p>\n<p><strong>Japanese yen<\/strong><br \/>\nNo superlative is enough for the rapid weakening in the Japanese yen in the wake of the BoJ move. <a href=\"http:\/\/seekingalpha.com\/article\/1313491-nikkei-finally-slides-as-yen-s-recent-strength-gains-more-momentum\" target=\"_blank\">When I wrote<\/a> about how the Nikkei was finally selling off just on the heels of a 3-week strengthening of the yen, I claimed that it had opened a rare buying opportunity for iShares MSCI Japan Index (EWJ) and a good spot to open fresh shorts on the yen. However, I did not anticipate this instant surge to fresh 2+ year highs for EWJ. <\/p>\n<p><center><br \/>\n<figure id=\"attachment_17382\" aria-describedby=\"caption-attachment-17382\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_EWJ.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_EWJ.png\" alt=\"EWJ gaps up to fresh highs in the wake of the BoJ\" title=\"EWJ gaps up to fresh highs in the wake of the BoJ\" width=\"500\" height=\"350\" class=\"size-full wp-image-17382\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_EWJ.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_EWJ-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-17382\" class=\"wp-caption-text\">EWJ gaps up to fresh highs in the wake of the BoJ<\/figcaption><\/figure><br \/>\n<br \/>\n<figure id=\"attachment_17383\" aria-describedby=\"caption-attachment-17383\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_EWJ-weekly.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_EWJ-weekly.png\" alt=\"2013&#039;s rapid gains only take EWJ back to where it was the week before disaster struck the country in 2011\" title=\"2013&#039;s rapid gains only take EWJ back to where it was the week before disaster struck the country in 2011\" width=\"500\" height=\"350\" class=\"size-full wp-image-17383\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_EWJ-weekly.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_EWJ-weekly-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-17383\" class=\"wp-caption-text\">2013&#039;s rapid gains only take EWJ back to where it was the week before disaster struck the country in 2011<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>{snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_17385\" aria-describedby=\"caption-attachment-17385\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_USDJPY.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_USDJPY.png\" alt=\"No rest for the weary - the yen looks ready to get a lot weaker on a breakout of USD\/JPY to 2009 levels\" title=\"No rest for the weary - the yen looks ready to get a lot weaker on a breakout of USD\/JPY to 2009 levels\" width=\"500\" height=\"350\" class=\"size-full wp-image-17385\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_USDJPY.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_USDJPY-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-17385\" class=\"wp-caption-text\">No rest for the weary - the yen looks ready to get a lot weaker on a breakout of USD\/JPY to 2009 levels<\/figcaption><\/figure><br \/>\n<br \/>\n<figure id=\"attachment_17386\" aria-describedby=\"caption-attachment-17386\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_GBPJPY.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_GBPJPY.png\" alt=\"Playing the British pound against the yen may be even more attractive given the amount of upside to be gained from pre-crisis levels\" title=\"Playing the British pound against the yen may be even more attractive given the amount of upside to be gained from pre-crisis levels\" width=\"500\" height=\"350\" class=\"size-full wp-image-17386\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_GBPJPY.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_GBPJPY-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-17386\" class=\"wp-caption-text\">Playing the British pound against the yen may be even more attractive given the amount of upside to be gained from pre-crisis levels<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>I mention the British pound (FXB) as potentially an even better play than the U.S. dollar because it seems to have bottomed for now.<\/p>\n<p><strong>British pound<\/strong><br \/>\nThe Bank of England (BoE) delivered no surprises <a href=\"http:\/\/www.bankofengland.co.uk\/publications\/Pages\/news\/2013\/004.aspx\" target=\"_blank\">in keeping rates and QE steady<\/a>. However, with economic conditions weakening, the lack of action seems to imply that stubbornly elevated inflation levels are causing hesitation. {snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_17387\" aria-describedby=\"caption-attachment-17387\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_GBPUSD.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_GBPUSD.png\" alt=\"GBP\/USD appears to have bottomed for now\" title=\"GBP\/USD appears to have bottomed for now\" width=\"500\" height=\"350\" class=\"size-full wp-image-17387\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_GBPUSD.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_GBPUSD-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-17387\" class=\"wp-caption-text\">GBP\/USD appears to have bottomed for now<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p><strong>The euro<\/strong><br \/>\n{snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_17388\" aria-describedby=\"caption-attachment-17388\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_EURUSD-30min.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_EURUSD-30min.png\" alt=\"The euro rallies against the U.S. dollar first on ECB and then U.S. employment news\" title=\"The euro rallies against the U.S. dollar first on ECB and then U.S. employment news\" width=\"500\" height=\"350\" class=\"size-full wp-image-17388\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_EURUSD-30min.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_EURUSD-30min-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-17388\" class=\"wp-caption-text\">The euro rallies against the U.S. dollar first on ECB and then U.S. employment news<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>{snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_17393\" aria-describedby=\"caption-attachment-17393\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_EURUSD.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_EURUSD.png\" alt=\"The euro is facing some stiff overhead resistance\" title=\"The euro is facing some stiff overhead resistance\" width=\"500\" height=\"350\" class=\"size-full wp-image-17393\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_EURUSD.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_EURUSD-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-17393\" class=\"wp-caption-text\">The euro is facing some stiff overhead resistance<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p><strong>Swiss franc<\/strong><br \/>\nOne factor working against the euro is the creeping recovery of the Swiss franc (FXF) from weakness earlier in the year. {snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_17389\" aria-describedby=\"caption-attachment-17389\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_EURCHF.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_EURCHF.png\" alt=\"The euro has yet to regain its momentum against the Swiss franc that is achieved earlier in 2013\" title=\"The euro has yet to regain its momentum against the Swiss franc that is achieved earlier in 2013\" width=\"500\" height=\"350\" class=\"size-full wp-image-17389\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_EURCHF.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/04\/130405_EURCHF-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-17389\" class=\"wp-caption-text\">The euro has yet to regain its momentum against the Swiss franc that is achieved earlier in 2013<\/figcaption><\/figure><br \/>\nSource of charts: FreeStockCharts.com<br \/>\n<\/center><\/p>\n<p>Be careful out there!<\/p>\n<p><strong>(This is an excerpt from an article I originally published on Seeking Alpha on April 7, 2013. <a href=\"http:\/\/seekingalpha.com\/article\/1325091-week-of-major-currency-shifts-flips-me-bullish-australian-and-british-currencies\" target=\"_blank\">Click here to read the entire piece<\/a>.)<\/strong><\/p>\n<p>Full disclosure: long SSO calls, short GBP\/USD, net long Australian dollar, long EUR\/CHF, long USD\/JPY<\/p>\n","protected":false},"excerpt":{"rendered":"<p>(This is an excerpt from an article I originally published on Seeking Alpha on April 7, 2013. Click here to read the entire piece.) {snip} The market seemed to convulse on the notion that the Fed could actually end asset purchases but seemed to ignore the conditional of a much improved labor market and improving &#8230; <a title=\"Week of Major Currency Shifts Flips Me Bullish Australian and British Currencies\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2013\/05\/13\/week-of-major-currency-shifts-flips-me-bullish-australian-and-british-currencies\/\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[386,59,794,20,204,21],"tags":[310,128,299,385,376,1595,309,127,447,459,513,384,138,115,65,362,333,1591,1144,454],"class_list":["post-17349","post","type-post","status-publish","format-standard","hentry","category-australia","category-economy","category-europe","category-forex","category-japan","category-u-s-dollar","tag-australian-dollar","tag-british-pound","tag-dxy0","tag-eurchf","tag-eurusd","tag-federal-reserve","tag-fxa","tag-fxb","tag-fxe","tag-fxf","tag-fxy","tag-gbpusd","tag-japanese-yen","tag-monetary-policy","tag-sp-500","tag-spy","tag-swiss-franc","tag-u-s-dollar","tag-usdaud","tag-usdjpy"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Week of Major Currency Shifts Flips Me Bullish Australian and British Currencies - ONE-TWENTY TWO: Trading Financial Markets<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drduru.com\/onetwentytwo\/2013\/05\/13\/week-of-major-currency-shifts-flips-me-bullish-australian-and-british-currencies\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Week of Major Currency Shifts Flips Me Bullish Australian and British Currencies - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"(This is an excerpt from an article I originally published on Seeking Alpha on April 7, 2013. Click here to read the entire piece.) {snip} The market seemed to convulse on the notion that the Fed could actually end asset purchases but seemed to ignore the conditional of a much improved labor market and improving ... 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