Tuesday 6 March 2012

Follow the leader....

Just learn that Temasek has sold 64.2mln shares of Sembcorp Marine. Not about to dwell into the percentage but is this a totally commercial decision or a case of professional money getting out ahead of a potential spike in risk aversion?

Of course the other observations have been:
  • selloff in precious metals
  • relatively firmer USD, EUR, GBP & JPY
  • softer NZD & AUD
No one can confirm this until it happens but tell tales must not be ignored and prudence guides us to moderate our decision-making.

Indeed E$ unfolded as forecast yesterday. Tested 1.3160 during Asian hrs and bounced off to test the high side during the NY session. Another 2 pairs of EURNZD and GBPAUD had a great field too! :)

So what's in store for us today?
11.30am, RBA rate decision will inject the one and only boost of testosterone into the market. Don't think they will hike, many are expecting no action but the surprise will be a cut or a dovish enough outlook. 
Has the market not already geared for less optimistic outlook for Aussie rates or is this only the tip of the iceberg? Personally, I feel AUD is at the stage where it should be more vulnerable to negative news.

Back to the E$.....

Consolidating to build a base around 1.3200 (1.3160 should hold for this round). Still feel more upside bias with a test of 1.3280/90 (1.3350/60 news induced) amid choppy price action. EUR is seeing demand from the firmer EURXXX rather than a direct buy. Enjoy while it last for now.
Having said the above, I will not discount the possibility of E$ probing lower towards 1.30ish in the later days before it resumes its bull trend with target of 1.4000.


To be very honest, its murky today and I should be scalping and patiently await to re-enter long EURNZD.

All the best and will update as and when if there is anything exciting.


Update1: The conclusion of the RBA statement left open the possibility
of further easing if the economy weakened: "With growth expected to be
close to trend and inflation close to target, the Board judged that the
setting of monetary policy remained appropriate for the moment. Should
demand conditions weaken materially, the inflation outlook would provide
scope for easier monetary policy......"
AUD negative.....


Update2: Actually basing on EURXXX, the EUR correction on the downside may probably be over and resuming its uptrend. Will continue to monitor for more signals.


Update3: Sell-off in AUD & NZD should take a break for now.

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