AUD,NZD/EUR/USD/Trade Ideas

EUR/AUD: Time for a big call; set to rise 20% in coming months

The FX market is all about positioning and in my opinion the market is structurally long of AUD (long Australian assets) at extreme levels and most of the big banks tell us that the underlying demand for EUR is very strong (and really only the speculators are selling).

I’m obviously talking my position here, (and it is a fantastic one 🙂 ), but I feel that a break and weekly close above 1.3250 say, will open the way for a major short-covering rally. If EUR/AUD can reach 1.50 then the AUD/USD would need to fall to my target at 92 cents and the EUR/USD would need to be back near 1.3800. I think this is achievable.

  1. EUR/USD has been range trading for years. These guys were super bullish at 135 now they are bearish at 128, enough said. More wide range trading ahead in my view, 125/140 for years 🙂

    1. Quite enough, Sean :In Euro now I do not see anything interesting, if only short-term trading, then it is important to look for 1.2842. I see a correction in AUD, as the daily chart tells me about it. The correction with the aim of 1.0146 and possible 1.0200

  2. BNP Paribas is long Teflon Euro targeting 1.34, risking 1.2840. Euro shorts and profit don’t seem to be getting mentioned in the same sentence to often, so it seems worth a shot.
    EURAUD has been a kickarse trade though. I started building longs since below 1.24, so that sort of lift would do me well, and I’d be happy to take that trade to 1.50. On fundamentals, I think the Aussie bull talk has been a load of bull for years – it was just a matter of timing. (Thanks for that initial call on EURAUD too!) The big question is where to start adding to longs at these levels. I set my profit taking targets at 1.295 (hit) and 1.32/1.36, which doesn’t get me to 1.5, and even if I can the next targets doesn’t leave me with a position size that takes full advantage of the excellent r/r on offer if it gets up there.

  3. Sean, Technically just looking at the long term charts of pairs like GBP/NZD – EUR/AUD or GBP/AUD, it looks like they might have come too far. But isn’t it like the world has changed since day days of 1990/2000 and NZD + AUD has become more important economies then years before and even though current valuations look extreme, true balance just can’t be at the levels with respect to decades before either? what are your thoughts on that? Thanks.

  4. Hi Schubes, as always with trading there is a bit of luck involved and we need to get pullbacks to our preferred levels. Watch this 13200 closely as if we get a few daily closes above there and it can’t break back below, then maybe we can close eyes and take a big swing 🙂 Worth watching closely

  5. Excellent point HP but the market has fallen a long way in pairs like GBP/NZD and EUR/AUD and there will now be the natural human doubt re whether we have fallen too far or not? This is what’s happening now imho a natural market retracement as the mkt tries to find an equilibrium logical level

  6. Sean,
    i fancy going long gbp/nzd. looking at a pullback to 1.86 perhaps. not very sure we will come down to that level. this pair has been far too down and long is just waiting in the horizon.

  7. Hi Danny, always bit tricky getting the right entry level I feel so I like to always start with small positions until I get a feel for correct levels and then look to increase.

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