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4 Feb 2015
Still running AUD/USD shorts - Westpac
FXStreet (Bali) - Westpac released a quick update on this week's High Conviction Trades, noting that they have exited for profit USD/CAD longs, NZD/USD shorts, while they remain short AUD/USD from 0.8020.
Key Quotes
"This week's High Conviction FX Trades flagged continuing shorts in AUD, NZD and CAD for another week, closure of a long held EUR short and selling USD/JPY on strength."
"However today's sharp fall in the USD has seen our trailing stops hit on a couple positions. Our long USD/CAD position, opened on 12 Jan at 1.1979 was closed today at 1.2365, crystalising a +3.2% return. The 20%+ rise in crude oil prices in the last three sessions has been the key catalyst for USD/CAD weakness. The focus is likely to swing back toward BoC easing prospects in coming days with the IVEY PMI tomorrow and Friday's January employment reports facing substantial downside risk as the energy patch deflates."
"We have also exited our short NZD position, opened at 0.7430 on 27 Jan at 0.7407, for a nominal 0.3% return, just ahead of a key speech from RBNZ Governor Wheeler.
Our portfolio of trades are informed at the start of each week by directional bias of our G10 FX model, weekly macro and technical views."
"It may well be the case that our process will inform fresh short positions in both NZD and CAD early next week, at market if all three inputs are bearish or on strength if two of three inputs are slanted against the currency. For the time being though we have just one position - short AUD/USD from 0.8020."
Key Quotes
"This week's High Conviction FX Trades flagged continuing shorts in AUD, NZD and CAD for another week, closure of a long held EUR short and selling USD/JPY on strength."
"However today's sharp fall in the USD has seen our trailing stops hit on a couple positions. Our long USD/CAD position, opened on 12 Jan at 1.1979 was closed today at 1.2365, crystalising a +3.2% return. The 20%+ rise in crude oil prices in the last three sessions has been the key catalyst for USD/CAD weakness. The focus is likely to swing back toward BoC easing prospects in coming days with the IVEY PMI tomorrow and Friday's January employment reports facing substantial downside risk as the energy patch deflates."
"We have also exited our short NZD position, opened at 0.7430 on 27 Jan at 0.7407, for a nominal 0.3% return, just ahead of a key speech from RBNZ Governor Wheeler.
Our portfolio of trades are informed at the start of each week by directional bias of our G10 FX model, weekly macro and technical views."
"It may well be the case that our process will inform fresh short positions in both NZD and CAD early next week, at market if all three inputs are bearish or on strength if two of three inputs are slanted against the currency. For the time being though we have just one position - short AUD/USD from 0.8020."