All square, now waiting on the ‘inevitable’ dips
I have been probing AUD/JPY shorts since yesterday as the recent move higher felt overdone. That said, I’m only jumping in and out for quick wins and keeping my ammunition dry for further cable and AUD/USD longs.
Cable is still my preferred play and I’m hoping to get back on the long trade somewhere on the 1.24 handle (with a bit of luck and wishful thinking!). One point in my favour is that the bears at 1.22 have turned bulls at 1.27, a sure sign of an interim high! If I told you where I think it might go in the next few weeks you’d probably have me committed so suffice it to say I’m expecting some over-extensions if/when the over-hedged GBP shorts get scared.
AUD/USD should be more sedate, having unwound much of its over-sold properties on the crosses (AUD/JPY, EUR/AUD etc). I’m expecting this market to slip back into more traditional Aussie trading patterns and plenty of sideways stuff should be the order of the next few months.