AUD,NZD/GBP crosses/Others/Trade Ideas/USD/JPY

Time to re-group after Friday’s heavy flows

It’s pointless looking for logic once big asset manager month-end flows hit the market; they deal regardless of price or trend and once the dust settles then the market can get back to normal.

  • Pairs like NZD/JPY were harshly treated towards the end of the week and now we must see whether the market can reverse those 2.5% losses.
  • The AUD has already started a mini recovery after stronger-than-expected China manufacturing PMI data was released over the weekend and the big levels to watch in the AUD/USD are .9525/.9700.
  • Cable tested and held the neckline of it’s double-bottom and I have increased my long position there with an obvious stop-loss level now below 1.5130.
  • EUR/CHF looked quite soft at times towards the end of the week but strong bids at 1.2370 are holding this pair for now.

Good luck this week.

  1. Morning Sean, just wondering if you are seeing much about the big protests happening over in Turkey? I was long TRY/JPY going into the weekend and starting to think it might be time to flatten that position out, as the rallies in emerging market currencies seem to be long in the tooth. I like it as a long term carry trade, but not if the country there is torn to pieces by unrest.

    However to my surprise the market had hardly gapped down to start at all – I guess Turkey is a little exotic and maybe traders haven’t woken up to it, or do they think unrest in Turkey isn’t going to effect the economy there? Any views?

  2. Morning fxgai, I’m not even sure that there is a mkt in TRY at this time of the morning? Might be still old prices you are seeing. Can’t imagine many dealers here in Sydney quoting prices already? Not a mkt I follow closely but I will have a scout around

  3. Yeah, I was thinking I wouldn’t see any liquidity until 25 minutes from now but the shop I have a position with is already up and running. Hopefully they aren’t a bucket shop 🙂

  4. I will ask a few banks this am whether there is any liquidity there at all in Asia. If brokers are making mkts then you really do need to watch that s/l level 🙁

  5. Thanks Sean. I’ve gone and closed most of my position already, Fortunately I’ve made a lot of money on this pair since Abenomics started so no hard feelings!

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