Very quiet Asian session ahead of risk events tonight

Absolutely nothing to report from today’s ‘excuse’ for a trading session. AUD/USD took out light stops above 1.0415 but immediately ran into sell orders at 1.0420 and retraced to opening levels. USD/JPY edged higher early but the level of interest was very low; and the prospect of ACBs buying near 1.2920 in EUR/USD dissuaded the bears from having another downside run. Perhaps the Europeans can come up with a reason to trade, let’s hope so.

  1. Good morning Sean and all,

    Regarding EURUSD, my tiny recommendations today:

    – Short (Scalp) the EURUSD on rallies in between 1.3070-1.3080 for 10-20 pips profit.
    – Buy (Scalp) the EURUSD on sell-offs in 1.2830-1.2815 for 10-20 pips profit.

    Analysis: The market remains undecided and volatility continues to contract in EURUSD. These last days the risks to the downside have been accumulating. Greece is starting to become instable again. Spain is showing off its pride. On the other hand, the results of the US elections next week might affect sufficiently sentiment to spark some market movement. Today NFP data might also create wide movements but most likely will only add to an already fuzzy picture (except if data is above 200k or below 50k). From a technical point of view, the EURUSD is stuck within an undecision wedge pattern, and seems likely to test today the bottom of the wedge at 1.2890. A very high risk approach would be to buy into such a sell off for some very short term profits, but we do not recommend this. We would patiently wait for the NFP data to provide us either a retest of the 200-DMA (~1.2830) for a buy entry or a retest of the trend line resistance from the tops in april 2011 and august 2011 for a short entry (~1.3070). Given the uncertainty in the air, we would not keep these positions over the week end and try to collect profits today.

    Good luck.

  2. Regarding my recommendation of yesterday. USDNZD hasn’t reached yet the first target of 0.829 but will most likely do. AUDUSD has had trouble stabilizing above 1.04 as I was expecting but eventually it will. All of this provided there is no negative sentiment generated from the NFP.

    In my view, the low risk trade remains shorting EURAUD (or EURNZD). Yesterday we had a nice entry point (and +100 in EURNZD!), today it’s not as good.

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