From the New York Stock Exchange, my name is Kiana Danial they call me Invest Diva, Happy St. Patrick’s Day! And this is your Diamond analysis of a currency pair dancing on the forex dance floor; a metaphor we use at Invest Diva’s education program which refers to the trading chart. We like to think that the currency pairs are making history by their dancing moves.
Not too much out of the US of note over the weekend. One thing we think worth mentioning is the size of the losses that the Fed now hold on their balance sheet. The securities it has bought through QE are now collectively worth $53bn less than the current market value. This will only be a problem if they decide to shrink the balance sheet and sell the assets, rather than hold them to maturity, but does highlight just how expensive propping up a country can be.
To China, briefly, where the PBoC have decided to widen the daily trading band of their currency, the Yuan, to 2% on either side of the daily fixing rate, from 1%. The wider trading band should allow the currency’s value to be more market determined and in theory would be welcomed by investors and speculators alike.
The pick of the day is Aussie dollar as Mr. Aussie got me a bit worried before the market close last week. After I went long the Australian dollar against the US dollar, the pair started teasing and formed a bearish spinning top on the forex dance floor while still remaining above the Ichimoku cloud. With the market open this week the pair who may just had a great weekend, started dancing passionately to the north once again, bringing my position back to the winning side. The RSI is pointing up, yet to reach the over-bought zone and we could see more gains towards the 50% Fibonacci level at 0.91950.
We do have the Australian monetary policy meeting minutes report tonight which could create some volatility so I would keep an eye on the market sentiment at 8:30 pm EST. For Ms. USA, this week’s US FOMC meeting could see the Fed revise their guidance and as such give the market a much clearer picture on future interest rates. But that is not until Wednesday and I’m hoping to have made some pips on this pair by then.
Stay tuned for more updates and if you want to become your own analyst, come one over to InvestDiva.com and enroll in our education program.