I was very bullish AUD/USD at .62/.63 and congratulated myself for my cleverness when I booked 900 pips profit. Unfortunately the market has risen another 18 big figures since then and I now look like a goose. One of the biggest FX moves in recent memory and I’ve been fighting it. If this really is the great devaluation of the USD, why am I not still on it? Not only has the pair risen 30 big figures off its lows, but it is doing so easily and the pullbacks are negligible. The commodity story (as can be seen from yesterday’s commodity figures out of China) remains very strong and the demand for the AUD is almost insatiable. Whilst I am not able to bring myself to buy it, I think many other market participants feel the same way and that is why we are perhaps on an inevitable course to 1.00 and above.
It has also come to my attention that analysts at more than one of the big Australian banks are being “strongly advised” by their senior management to lower their AUD/USD forecasts so as not to spook the market too much. One bank analyst felt that the AUD/USD could trade well above 1.00 in the next 12 months but was told in no uncertain terms to tone his forecasts down considerably.
This market smells of danger, and the side which will hurt the most people is the topside.