AUD,NZD/EUR/USD/Flows and Orders/USD/JPY

FX market still in stop-loss mode: Positioning light ahead of election results

My main feeling at the moment is that the market is still in stop-loss hunting mode. Yesterday we saw USD/JPY orders below 80.00 targeted and eventually triggered. This is what drove the market and the rubbish rumours about big flows turned out to be just that. EUR/USD eventually found a base near Sovereign bids at 1.2765 and started triggering trailing stops back above 1.2810. The AUD seems to be the one currency driven by solid sentiment and flows, with reserve managers piloting it higher.

The US election results should start flowing in around 02:00 GMT but its unlikely that we see any big moves until after the result is officially announced. Prime brokers report that positioning is now very light amongst the shorter-term players so I do not expect to see any major volatility during this session.

  1. It was quite a strong finish for risk at the end of Euro session. But end of US session seems to do some minor risk selling. I am still struggling with AUD/USD. From one point of view I like short at current levels, but on the other hand sentiment is quite bullish and the risk of running stop losses above is substantial. Do you have any view on it for asian session?

  2. Hi Kirill, I’m just doing up a positioning report which I will send out later but the crux is that the market is pretty flat position wise but the bids are much bigger than the offers so mkt is keen to get long. Sounds like we head higher. I’m still running a short position and hoping to cover some/most near 10370ish. If bearish, then be patient as we could see 106 imho

  3. 1.037 seems aggressive given market mood. I am thinking about cutting all shorts around 1.04 (or lower if market will cooperate). Gold was remarkable today, as well as WTI. Though on bearish side, I was impressed that 1.045 did hold for AUD/USD during US session.

    Agree that I will need to wait several days before dust will settle on the upside. If it get to 1.06 I will be happy to reestablish short.

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