RBA spent $3bn defending Aussie

www.afr.com/home/viewer.aspx?ATL://12271...3bn+defending+Aussie

Liviu,

Great find on that article. I think it is interesting to see the magnitude of the intervention juxtaposed with the thought that the Australian government won't have to do any deficit spending to combat recessionary pressures. The Australian economy will certainly be one that bounces back quickly when the recession is over and demand for commodities once again begins to boom.

The RBA and RBNZ look ready to keep buying their respective currencies to keep them above 0.6000 (AUD) and 0.5000 (NZD).

www.bloomberg.com/apps/news?pid=20601083...8&refer=currency

AUD/USD intraday: continuation of the rebound.
Pivot: 0.6625

Our preference: Long positions above 0.6625 with targets @ 0.6755 & 0.68 in extension.

Alternative scenario: Below 0.6625 look for further downside with 0.6562 & 0.6538 as targets.

Comment: the RSI is bullish and calls for further advance.

I noticed in the video today that you were bullish for the AUD/USD. Are you not worried about the risk aversion in the markets. And if you think that risk appetite is returning and that the rally of the price of gold is enough, why are you bearish the EUR/USD. If the AUD/USD is able to rally, wouldn't you expect the EUR/USD to rally as well with a return in risk appetite? Both charts look similar. We are in a downtrending channel on the daily chart but there is an uptrending support line on the weekly. Neither lines have been violated.

Mickey, I've been bullish on the AUD because I have been watching commodities and believe they have found a solid support level. Since Australia is a huge commodity exporter---especially to China---I think the AUD will benefit from a stabilization or boost in commodity prices. I'm not bullish on the EUR because the Eurozone doesn't enjoy the same relationship to commodities.

Of course, if this recession goes even deeper than most people are predicting at this point, my play on a stabilization of commodity prices, and thus a rise in the AUD, is going to go right out the window. I'm watching support at 0.6350 closely for that very reason.