Astute observers of pricing activity will be fascinated by an intriguing tug of war with Aussie lately. During this week the Aussie has made repeated attempts to break back above parity, but every time I fall Do not force yourself to wait. This scenario was repeated again tonight, when the Aussie fell in the early stages of parity to a low of 0.9876 in early trading in London. Partly, this can be attributed to the announcement made by Prime Minister Gillard that it introduces "tax on the flood." Gillard said that the flooding will cost the economy 5.6 billion Australian dollars, or about 0.5% of GDP. While this statement was not a surprise, there was some revision of expectations of rising interest rates. Latest news on manufacturing and consumer prices have also limited the fears of rising interest rates.Ossie hesitated the first ten days in 2011 to 1.2 to 0.98, and mostly limited to fairly
narrow range of two figures from 0.9850 to 1.0050. Tellingly, the upper range of aggressively sold off. According to the latest CFTC, there is very little probability that currency traders are currently doing long positions on the Aussie. Despite a slight spike Long in the beginning of this month, in fact, there was no great change in the total long positions on the Aussie for some time. In essence, the Aussie was trading right near parity last three months. At some point, everything can be matched so that traders would be forced to abandon these Long.
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