LTG GoldRock Profitable Trades December 12th 2013

 

In the LTG GoldRock Forex Webinar earlier in December Andrew Barnett placed 2 trades live in front of over 250+ webinar attendees. The above snapshot is the results of those Forex Trades. ie. a total of $2,031.39 in profit.

LTG GoldRock Reviews the Trading News December 18th.

- The US Fed will announce its decision regarding tapering tomorrow morning at 6am Sydney time and I would strongly urge all members of LTG GoldRock to be up and watching and listening to the report and press conference that will follow. You can do this via www.bloomberg.com/tv.

- The Australian dollar has an overwhelming number of short traders banking on a positive taper decision from the US Fed in December, however Bloomberg put out a survey today saying that only 30% of their leading economists who they survey each month believe the Fed will taper in December. I am with the 30% crowd but if a taper is not the order of the day then expect a short squeeze on the Aussie Dollar back higher.

- We will give you some suggestions before Friday on how to maintain your positions through the Xmas period if you are using the Order Sheets.

- The Aussie Dollar has risen slightly today on the back of Glenn Stevens’s remarks in Canberra. Stevens would prefer not to put interest rates down any further and the following remarks spurred some buyers for the Aussie Dollar today. “Because inflation has been consistent with the target, the board has been quite comfortable in easing policy by a significant amount. The board has maintained an open mind about whether we may need to lower interest rates further. At this point, however, there are few serious claims that the cost of borrowing per se is holding back growth.”

Glenn Stevens sends the Aussie towards 0.85c.

As my plane touched down on Thursday evening it was around 10.00pm and I could not help but immediately switch on my phone and check to see what price the Aussie Dollar was trading at against the US Dollar. My Bloomberg App showed the price 0.9045 which was not far off where the price was when I took off from Auckland 4 hours earlier. That was no real surprise to me as the US Retail Sales number at 11.30pm Qld time was likely going to be the driver over the next 12 hours with any positive news for the US more than likely to drive the Aussie lower. So I grabbed by bags, cleared customs and jumped in the car for the hour and a half drive back to Noosa Heads.

I knew on the drive up the coast from Brisbane that the US Retail Sales number would be released about half an hour before I got home so it would be a question of temptation to whether or not I would glance at my blackberry and push the Bloomberg button.

I waited until at least 5 minutes after 11.30pm before I pushed the button on my phone and immediately I saw the Aussie was trading at 0.8970 which was close to a full cent lower than it was less than an hour ago. I didn't read the article on Bloomberg I just glanced at the headline that read, "US Retail Sales" beat market estimates" and naturally thought that the Aussie had dropped on the back of more positive sentiment towards the US Fed tapering its stimulus program. But a drop of 80 pips?

What I teach all the time is to expect the unexpected and that is what really drove the Aussie lower, unexpected news that had little to do with the US Retail number after all. What really happened was the following.  Glenn Stevens the Reserve Bank of Australia Governor did an interview with the Australian Financial Review that was due for release in its Friday paper but as we all know very well, papers are a dying industry and online is the place people are flocking to read the news. Fairfax publishes the next day’s newspaper on its website usually before midnight the previous night and what had happened to the Aussie had little to do with the US Retail Sales number and had everything to do with Glenn Stevens comments that hit the online Fairfax news wires sometime between 10.30pm and 11.30pm on Thursday evening.

I made some comments in the LTG GoldRock report last week about the Aussie not going as low as some may think it will but 0.85c seems very likely in the short to medium term now as traders will use this price as a target to aim for now the RBA has signaled its intentions. The RBA as you are starting to learn usually gets what it wants eventually so why would you be silly enough to trade against what a Central Banks wants its currency to do?

Remember that it is the "wisdom of the crowd" that drives price and the crowd is now aiming for that 0.85c number and with the news that is coming this week the lows on the Aussie for 2013 certainly seem like they are coming closer by the day.

US Retail Sales shine and beat estimates in November.

The Aussie Dollar sank again the moment the latest US Retail Sales data was released that showed Americans spent more in the month of November than in the 5 preceding months. Two days in a row the Dow Jones has closed down over 100 points and this is a genuine sign traders on Wall Street are starting to sell stocks to lock in profits they have made in 2013 ahead of the higher likelihood of the US Fed tapering its stimulus program which is likely to drive stocks initially lower.

The Retail Sales data was up 0.7% on the same time a year ago and as I have continued to advise you in this report any positive high impacting news for the USA prior to the Fed tapering is likely to push the Aussie Dollar to new lows against any currency with the potential of a rising interest rate. The Aussie Dollar accelerated overnight to new lows against the US Dollar, Kiwi Dollar and British Pound which are all countries with the potential for higher interest rates in 2014.

LTG GoldRock Reviews the most relevant Forex News each day.

Australia's unemployment rate rises once again.

Today saw the latest unemployment figures released for Australia and it was another trend higher for the official unemployment rate, this time up to 5.8% from 5.7%. But what was surprising was that the economy added 21,000 jobs last month which was much higher than the market expected.

A rising unemployment rate, weak jobs growth and an Aussie Dollar over 0.90c is only going to bring forward the chances of the RBA dropping interest rates or intervening on the Aussie Dollar to bring it back down into the 0.80c range. If the US Fed decides not to taper until February or March next year and the Aussie Dollar is still over 0.90c I will predict an interest rate cut in the month of February and an outright open intervention by the RBA which would mean it selling some of its Aussie Dollar reserves to push the Aussie Dollar lower. I encourage any trader with an open AUD short position to consider holding this position (do not adjust your stop loss wider) until December 18th because if the US Fed decides to taper the Aussie Dollar will likely fall further. If it does it may do the job that the RBA is trying to do, but it will be a wait and see game and I can't see any reason for the Aussie Dollar fundamentally to trend back higher at least until after the US Fed decision on tapering. If it’s “no taper”, the Aussie will find some buyers but if it’s “taper time” then the sellers are likely to hit it hard.

RBA Governor Stevens has said the RBA will consider an open intervention on the Aussie Dollar and I think the RBA is firmly and absolutely committed to doing what it takes to get the Aussie Dollar back below 0.90c and heading towards 0.80c. If the US Fed doesn't taper in December or January and the Aussie is still over 0.90c look out for an open intervention. Remember, don’t fight against what a Central Bank really wants, you will likely lose long term.

Each day +Andrew Barnett from +LTG GoldRock reviews the latest Forex news and provides the information to Members in the GoldRock Insider Report.

LTG GoldRock Reviews What the Banks' Are Saying

- Pimco says it now has to be a 50/50 bet on the Fed tapering in December.

- Bank of America Merrill Lynch says the headwinds are fading and the tailwinds are gaining strength. Referring to the US economic recovery.

- Barclays Bank says it sees the jobs report on Friday as a positive but still sees March as the likely month the US begins to taper.

Economic Calendar: Times are AEST (Sydney Time)

• 10.50am   JPY     Japanese GDP (growth)
• 11.30am   AUD    Australian ANZ job ads report
• 12.30pm   CNY    China CPI (inflation)

Each day Andrew Barnett and the professional trading team at LTG GoldRock Reviews the latest Fundamental and Technical Forex News in a daily GoldRock Insider Report.