Asian market open, Wednesday October 30th
The USD has made more ground overnight, breaking through short-term resistance against the Yen after bullish moves yesterday against the AUD and the GBP. The economic calendar is again pretty bare and much depends on whether the market can be convinced to go looking for a trend in the lead-up to Christmas.
- AUD: The AUD/USD is sitting near Fibo support at .9460 (see chart) but a clean break below there will target levels around .9300. The failure at the 200-dma near .9740 and the break below .9520 certainly gives the daily chart a bearish feel. AUD/JPY has started to lose some of its bullish momentum and this could spell trouble for the Aussie. Conclusion; play an intraday range of .9460/.9530 with a sell-rally bias.
- JPY: The break above 97.80 has given the short-term bulls some momentum but the Yen crosses haven’t joined in which obviously implies that this is a USD move. I’m still hearing reports that one big Japanese player is selling large amounts of USD/JPY at regular intervals on rallies. Conclusion; too choppy for mine and I think there are better opportunities elsewhere. In fact, I might consider looking for selling opportunities in some Yen crosses, probably EUR/JPY, but I’ll have to wait as the technical picture doesn’t support it yet.
- GBP: I’m still bullish on cable and will look for deep dips to re-instate my medium-term long position. I think EUR/GBP will struggle to break above .8600 and will be significantly lower early next year but timing is everything as we know. The 4-hr cable chart has turned quite bearish (see chart) and a break below 1.5900 will have the bears salivating at the thought of a double-top. My scenario here is that we break below 1.5900 and test important support at 1.5750, which is where I would hope to buy. Then if we break back above 1.5900, I can add to the position. Well you gotta have a plan.
- EUR: In short, no idea. I’m bearish on the crosses like EUR/GBP and EUR/JPY but demand particularly out of China has been very strong in recent times and I’m loathe to take those guys on. Support levels start around 1.3690 and if you were lucky (good) enough to pick the top then I’d start booking some P around there. Rallies to 1.3800 will attract top-pickers but there will be stops galore above 1.3830.
Good luck today.