{"id":25384,"date":"2014-11-06T23:31:15","date_gmt":"2014-11-07T07:31:15","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=25384"},"modified":"2014-11-06T23:31:15","modified_gmt":"2014-11-07T07:31:15","slug":"trading-the-breakdown-of-the-australian-dollar","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2014\/11\/06\/trading-the-breakdown-of-the-australian-dollar\/","title":{"rendered":"Trading the Breakdown of the Australian Dollar"},"content":{"rendered":"

(This is an excerpt from an article I originally published on Seeking Alpha on November 6, 2014. Click here to read the entire piece<\/a>.)<\/strong><\/p>\n

The pressure is building on the Australian dollar (FXA). If it were not for the fresh collapse in the Japanese yen (FXY), the proverbial risk trade would be looking very shaky.<\/p>\n

As the U.S. dollar (UUP) continues its current climb, it is applying pressure on major currencies across the board. On November 5, CurrencyShares Australian Dollar ETF (FXA) finally gave in.<\/p>\n


\n
\"The<\/a>
The Australian dollar buckles under the pressure from the U.S. dollar<\/figcaption><\/figure>
\n<\/center><\/p>\n

I was bearish the Australian dollar for quite some time until American equity markets reached what I thought was a bottom<\/a> supported by resilient trade in the Australian dollar versus the Japanese yen (AUD\/JPY). The Bank of Japan’s massive expansion of its quantitative and qualitative easing program last week had me thinking that ALL manner of risk trades would be supported – not just stocks, but high-yielding currencies like the Australian dollar as well. This assumption has not proven out. For example, the Australian dollar has rapidly lost ground to BOTH the euro (FXE) and the British pound (FXB) since the Bank of Japan’s announcement.<\/p>\n


\n
\"The<\/a>
The Australian dollar was right on the edge of breaking through the 200DMA when the BoJ announced the expansion of QQE<\/figcaption><\/figure><\/p>\n

\"Even<\/a>
Even the euro has gained against the Australian dollar so far this month<\/figcaption><\/figure>
\n<\/center><\/p>\n

{snip}<\/p>\n


\n
\"A<\/a>
A 15-minute chart shows the potential for a blow-off top in the U.S. dollar versus the Japanese yen<\/figcaption><\/figure>
\n<\/center><\/p>\n

{snip}<\/p>\n

\"The<\/a>
The BoJ accelerated an ascent that was already well-established from the October lows<\/figcaption><\/figure>
\n<\/center><\/p>\n

{snip}<\/p>\n

The Australian dollar broke down at an intriguing juncture. {snip}<\/p>\n

Be careful out there!<\/p>\n

(This is an excerpt from an article I originally published on Seeking Alpha on November 6, 2014. Click here to read the entire piece<\/a>.)<\/strong><\/p>\n

Full disclosure: net short the Australian dollar, net short the Japanese yen, net long the U.S. dollar<\/p>\n","protected":false},"excerpt":{"rendered":"

(This is an excerpt from an article I originally published on Seeking Alpha on November 6, 2014. Click here to read the entire piece.) The pressure is building on the Australian dollar (FXA). If it were not for the fresh collapse in the Japanese yen (FXY), the proverbial risk trade would be looking very shaky. … 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":[386,59,20],"tags":[772,308,310,996,592,138,454],"class_list":["post-25384","post","type-post","status-publish","format-standard","hentry","category-australia","category-economy","category-forex","tag-audjpy","tag-audusd","tag-australian-dollar","tag-euraud","tag-gbpaud","tag-japanese-yen","tag-usdjpy"],"yoast_head":"\nTrading the Breakdown of the Australian Dollar - 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\/2014\/11\/06\/trading-the-breakdown-of-the-australian-dollar\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Trading the Breakdown of the Australian Dollar - 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 November 6, 2014. 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