FX positioning reports latest updates
The start of the week brings lots of interesting research from the major banks (which I’m sure you all love reading in the FXWW chatroom on Eikon Messenger!). There have been some short term changes over the last 3 weeks with AUD positioning back to neutral, CAD longs reduced and GBP longs starting to build.
Systematic traders need to re-assess Monday morning orders
Break traders took a hammering again on an illiquid Monday morning, and this time it was the CHF crosses that took the brunt of the volatility. As we know the market is now controlled by the big Algos, be they at the banks, prime brokers, or hedge funds. Whether we like it or not, these
Trader Sentiment & Positioning, week ending Jan 12th: Market still very square
There doesn’t seem to be much point in going through the currencies one-by-one given the low levels of positioning and general dis-interest! That said, one of the bigger US prop desks has reportedly started to pile into an early USD short position against the JPY and Gold in particular. The Algos are still dominating
USD/JPY: “Follow the Money” suggests downside risk for USD/JPY ahead of BOJ meeting
There has been a perception in the Asian market for decades that the big Japanese corporates somehow had the inside rub on major policy shifts by the BoJ. The idea being that hedging amounts tended to increase or decrease significantly in the lead up to major meetings. Next week’s meeting is looming as a major
Large fixing flows expected today
Most of the big banks are expecting very significant end-of-month fixing flows later today and all the reports that I’ve read so far suggest that these flows will be heavily USD negative with the GBP expected to be the main beneficiary. Overnight price action certainly doesn’t agree with these presumptions but it’s probably wise to
EUR/USD: Professional market still looking to sell despite Greek debt extension
Most of the research and trade strategies that I’m reading this morning from banks and professional traders shows that nothing much has changed despite the 4-month debt extension. Traders are still very much in sell-rally mode. The big levels to watch topside would seem to be around 1.1550, as a break above that will have
AUD/USD: Short-term exotic structure .7750/.7850
I’m not sure of the exact levels but the weight of bids towards .7750 and the weight of offers towards .7850 suggest that this is indeed a quick 100 pip play by one of the bigger players. All of the bigger interbank players were reporting similar order books yesterday. One source tells me that this
AUD/USD: Reserve buyers noted on dips today
Some nice snippets in the FXWW chatroom today regarding the AUD/USD. Reserve buyers have been notable on dips, and their amounts are usually significant. On the flip side, one of the big local banks reported that offers have been lowered from .8250 to .8150 by corporate and macro
EUR/USD: Should find support from option expiries #FXWWchatroom
Huge 1.25’s rolling off Monday and Tuesday 5 yards plus on Tuesday. You have to think it wont go to far until they roll off Just posted in the FXWW
EUR/USD: Barrier protection ahead of 1.3150
There have been some reports in the last few minutes in the FXWW chatroom of decent-sized selling flows in EUR/CAD and of strong bids ahead of an expected 1.3150 barrier in EUR/USD. There is an increasing expectation that the ECB will roll out some special easing measures as early as next week and that is fuelling
AUD/NZD: Gapping higher in stop-driven markets
Firstly it was EUR/USD where the stops were targeted, now its AUD/NZD which is the market focus. The market gapped nastily through 1.1100/10 to trade above 1.1150. There is very little technical resistance until
NZD/USD: Orders reports suggest ‘buy-dip’ intraday strategy
AUD/NZD: There are still reports of large stops below 1.0920 and a quick look at your charts will explain why they are there; AUD/USD: Solid corporate bids are reported near .9230/35 with more optionality at .9200. Sounds like a ‘buy-dip’ intraday strategy could pay dividends in NZD/USD and strong technical support at .8400 should attract
EUR/GBP: Happy to trade either side at the moment
The overall bias is still bearish but the market is caught short in thinning August markets, hence the rally at the end of last week; This pair has fallen a long way in a short space of time, so relief rallies are to be expected; I’m quite happy to try trading 50 pip moves either
Levels to watch in Asian session, July 28th
USD/CAD: 200-dma at 1.0830; EUR/USD: Large expiries tomorrow at 1.3450; Cable: Market eyeing 1.6925 as next important downside level; USD/JPY: Seemingly immovable obstructions 101.00/102.50 🙁 AUD/USD: Options players also all over this pair and with volumes heavily reduced from speculative accounts, breaking the range will be hard
NZD/USD: Model funds triggering stops below .8590
Most of the action is still in the flightless bird with stops triggered below .8590 in NZD/USD and the AUD/NZD cross trading above
AUD trying to edge higher after China flash PMI
The number was slightly above expectations and the market seems happy to try buying the AUD. AUD/NZD got a boost after the RBNZ this morning and there are big levels looming above 1.1000. AUD/USD looks like it will now gravitate towards big option strikes/expiries at .9500 and
Cable: Macro stops building below 1.7055
A reliable Prime Brokerage source suggests that we could be in for quite a battle if cable trades down towards 1.7070. There are decent bids starting near there but there are also heavy macro-type trailing stops below 1.7055. With little else to move the market at the moment, these orders may act like a magnet.
AUD should be well supported on intraday dips
Iron ore futures are +1.75% in early Asian trade; End-of-fin-year flows are expected to be AUD positive (although most of bigger flows are surely already