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Forex Trading Reviews & News 
So if you avid tennis fans in the FX-world can take your eyes off the ball for a moment with all the excitement of the Australian open, you might want to pay closer attention to the Australian dollar. The AUD has had a great run especially since early 2009, and if you even hitched the ride long term you might have already reserved the Musha Cay Island, in the Bahamas, for the big party, well maybe not. But before you book your tickets or jump on the yacht you might want to lock in some of those profits from the latest up swing, and, remember, bring your laptops, yea right! Like you would really leave your laptop, because we are in for some interesting days ahead.
So here is the deal, first let’s quickly look at the economics of it. Over the past Year the Australian economy has outperformed those of the rest of the world, and that’s great, it shows the resilience of the Australian economy even through “hard times”. But don’t get too excited about buying Aussie right now because the last time I checked, Australia’s growth is still very dependent on commodities and their exports.
Even If you have only done econ 101, this should raise some red flag, since as the net value of a countries economy increases so does the value of its currency, and in most cases, as with the Aussie so it is with interest rates in a bid to control inflation. On the flip side this causes the value of its goods and services to increase and invariably increases the attractiveness of its trading counterparts that offer lower rates. This if left untamed, will start to be an issue for our friends down under.
Up to the fourth quarter of last year we have seen declines in the AUD import price http://www.abs.gov.au/ausstats/abs@.nsf/mf/6457.0 . Declines were also seen in relation to exports, these and other factors might also dissolve any opinion of another interest rate hike come February 2 but probably a holding at the current 3.75% going into the better part of 2010. Also take note of the recent lending measures taken by China, one of Aussie's biggest trading partners. In summary, from at least a Medium term economic stand point I am getting bearish on the Australian dollar. I will review this in the coming weeks.
Next let’s look to the AUD/USD for some technical perspective. For the past 3 months the Aussie has been unable to close above the 0.91 level. On the chart snap shot shown (diagram 1) we saw divergence forming in late October with a break and close below the uptrend line back in November 2009 along with some reduction in momentum; and although there was a rally following this it failed to materialize to anything as, the trend was weak and, it was followed with a pullback shy of one of our key support levels around 0.89.
For those of you who haven't already taken advantage of this initial bear move, if the 0.89 level holds, you can look for opportunities to jump in short, at a failure approaching 0.93, as now at the time of writing, our short term studies are fairly oversold, and momentum seems to be slowing down a bit (diagram 2); although this might also be directly related to the FOMC rate decision a few hours from now. There also might be further consolidation between the 0.89-0.93 range in the coming weeks approaching AUD interest rate decisions and NFP so don’t take anything for granted.
The coming months should be very exciting for the Aussie, and the best bet for traders out there from Novice to Expert, is to do your home work, and stick to a trading style that works. But if all else fails don’t give up, take a break and take a trip down to Sydney and some of the other spots in Australia, and see why it has been said that Australia is a nice place to be, better yet if you leave now, you can catch the rest of the Australian open. And if anyone asks you where you getting this from you can say it’s just according to PipVille.
