AUD,NZD/JPY crosses

Good-news day out of China

  • Both official and HSBC PMI data came in near or above expectations:
  • The Shanghai index is over 1.5% higher:
  • Chinese home prices have risen for the 5th successive month:
Good news out of China is good for FX risk-trades so little wonder that AUD/JPY is the star performer today, currently +0.5% on the session. Not much I know, but we gotta talk about something 🙂
  1. Sean, I think today the AUDUSD and NZDUSD will break their current patterns. That is AUDUSD will finally establish itself above 1.04 and NZDUSD will go back to 0.83. The congestion pattern is particularly speaking in NZDUSD. Possible trade
    Buy NZDUSD @ 0.8220, SL 0.8190, target 0.83 and above.

    All this good news is clearly not totally priced in.

  2. Btw, probably the best risk/reward trade today is to short EURAUD (or EURNZD ;-))! I think we will see it 30-50 pips lower and one can leave it overnight for some swap collection 🙂

  3. Regarding EURUSD, here are my recommendations for today:
    – Best: Short the EURUSD at 1.3070, SL 1.31, targets 1.2950, 1.290 and below.
    – Very Risky: Short EURUSD at 1.3005, SL 1.3025, targets 1.2950, 1.290 and below.

    Analysis: As expected, yesterday the EURUSD did not fly high. But it didn’t fall hard either. The market remains torn apart between short term bullish technicals and short term bearish fundamentals. This morning the market has a bullish tone out of the positive Chinese PMI numbers and will most probably rally. However, we do not think that EURUSD will be able to break new highs (1.3020): most of the movement up will be in the asian currency pairs: AUDUSD, NZDUSD, AUDJPY. A possible low risk play is to short EURAUD. The bullish technicals mentionned yesterday remain in place. We have formed a doji following the engulfing bullish candlestick indicating indecision. Furthermore, there is a likely head and shoulder formation in process at the hourly timeframe. Since the action today will be driven by other currency pairs, it is dangerous to rely too heavily on technicals in EURUSD. If by any chance, we get positive US employment numbers, then 1.3070 could be in sight, and that would represent the best trading opportunity for a short entry.

  4. Thanks Iridium; I’m very interested in your mathematical signal giving %age chances on certain pairs; if you can combine that with good entry levels +risk-reward profile, then you are definitely on a winner. Good luck 🙂

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