Saturday, February 4, 2012

FX Updates & Troll Attack.

Just a quick update on what is happening in FX land.
Call it manipulation or coincidence, AUD sold off after the NYSE closed on Friday. It made a triple top  in the daily chart;
It is expected that RBA will reduce the rates by at least 25 basis points next week, which may trigger a correction.
Euro failed to break 1.32 level and is entering a decisive phase of the Greek drama.
The situation is clearly a mess. While Greece may not ultimately leave EZ, the game of brinkmanship and who will blink first is going on. Market do not like uncertainty. 9th February is the ECB rate decision day and while a rate reduction can not be ruled out, the credit situation in Europe is alarming. Only thing saving the market so far is the LTRO program of ECB. But I do not think the risk rally has priced in the Greek default yet or we do not know what is happening behind the scene.

US Dollar is sitting at critical support level.  
There are many factors which go into the fair valuation of a currency. I think the recent down trend of US $ has something to do with the expectation of a QE. Now that hope has been dashed, we may see a reversal of fortune for the greenback. There is a -0.86 correlation between USD and equities. With indexes at a record high, the risk appetite is not an assured thing. It sure going to be interesting next week.

On a different not, we are having Troll attack on this blog. There is one guy who posts nasty remarks about the blog. The worst part is, this troll does not have the courage to give his ID and like a little spoilt girl, he hides behind his mother and makes faces. He has no logic or argument. Now his favourite point is my missed call for the January bottom which did not come. I am the first person to admit when my calls go wrong and I do not think there is any one individual who can make 100% correct calls all the time. If I could I would not be sitting here writing this. The interesting thing that I have found so far is that most of the Trolls are from my own community, which is South Asian. My call to all the low life Trolls, you do not have to read this blog if you do not like it. Move on and get a life.

Thanks for reading my thoughts. Have a wonderful weekend folks.