Cable: Still likely to be stale longs happy to sell intraday rallies
The GBP looks pretty heavy still against the EUR and the AUD and I'm sure there are still some cable bulls out there who were caught long on the break lower through 1.5000? I'd expect any rallies to run into grateful sellers and we will likely see some broad 1.4850/1.5050 consolidation over the next few sessions.
AUD/USD: Moving my sell orders higher
This AUD market smells very oversold to my biased nostrils and I have a feeling that there will be a large amount of big trailing stops above .9250? I don't know this for a fact, I'm only guessing, but it would seem like a sensible place for the macro shorts to have their trailing stops. Have a look at the daily chart and you can see that it could easily trade back towards .9625 without endangering the bear trend.
I'm moving my sell orders higher to .9325, which may seem somewhat overly ambitious but you never know your luck :) I still think a lot of sheep have piled onto this bear AUD move at completely the wrong level and they could be in for some pain.
AUD: Heavy short-covering taking place
Reports of heavy AUD short-covering against the USD, JPY and CHF. A lot of traders have been selling AUD at the wrong levels and that can lead to really nasty stop-loss driven spikes. Look for .9240 to cap any further session rallies in the AUD/USD but buying dips definitely now preferred.
EUR/CHF: European hedge funds buying again in early trade
Exactly the same as yesterday, Swiss-based hedge funds have been buying the cross in early trade. Not sure what they know if anything, but best not bet against the so-called "smart" money!
AUD/JPY: Above 92.50 but needs some confirmation
We've been watching this level all day as being a big one and prices have now poked above 92.60. I would try and have some patience as we've seen plenty of false breaks recently, but if we get an hourly close above here, I'd definitely resort to dip-buying mode.
AUD/USD is making new short-term highs above .9140 and the next resistance levels there are at .9180 and .9250 (both quite strong).
EUR/JPY: Stops triggered above 130.20
Our hedge fund insider @FXWW888 is reporting that stops are currently being triggered above 130.20 in EUR/JPY and that Middle East names are buying EUR/USD. Next decent technical resistance in the cross is at 131.10.
AUD at session highs despite data
The AUD is looking reasonably bullish for a change, back at session highs despite poor business data. I'm still expecting a broad consolidation .9080/.9180 in short term but am feeling more confident now about my long trade. I have my stop now below .9000 and will look to reduce at .9240.
AUD slightly soft after NAB data and China CPI
AUD/USD traded to lows near .9085 after the poor-ish NAB business sentiment data, as well as Chinese CPI coming in slightly above expectations.
I'm not reading much into any of this and am basically looking for any unexpected behavioural patterns; nothing obvious thus far.
AUD/USD: Play 60/70 pip spikes either side after China CPI
I don't think the Chinese CPI will have any lasting effect on financial markets so I'd look to play spikes either side in the AUD/USD.
0.9180/90 should cal any rallies initially whereas if the market turns bearish again, I'd expect .9050/60 to provide solid support.
GBP: Still looking soft on the crosses
- EUR/GBP has had two daily closes now above .8600 prior resistance and the tendency would seem to be moderately bullish.
- GBP/JPY is in an overall bull trend but looks to have put in an interim top near 157.00. The first retracement has stalled near the 50% mark but there would still seem to be scope for a deeper pull-back towards the 61.8% mark at 145.00 (see chart).
- GBP/AUD looks horribly overbought and a minimum pull-back to the 38.2% level at 1.5960 (see chart) would certainly seem feasible.
I was a bit early last week in trying to buy the cable and while the GBP is headed lower on the crosses, there is little point in trying to pick a bottom in cable. Recent lows at 1.4830 were not re-tested yet but I'd expect any rallies now towards 1.5000 to meet with grateful sellers.
I'm medium term very bullish on the GBP but the timing isn't quite right so I'll sit back and watch for the coming weeks.
USD/JPY: Intraday break below 100.85 could see 100.00 test
Overall the recovery bull trend is the dominant factor at play here but it does look a tad overbought (see chart) and it would be certainly no surprise if we were to see a pull-back towards stronger support levels at 100.00. Initial support is at 100.85 and resistance at recent highs near 101.50.
AUD/JPY: Big level looming at 92.50
There is solid technical resistance at 92.50 in AUD/JPY (see chart) but a clean break above there could certainly change the short-term outlook and strengthen the case that an interim low was formed at 89.50.
The market is heavily short of the AUD, and feeling quite comfortable it seems, but is it comfortable being short AUD/JPY? I think we may find that out today.
AUD/USD: Potential base at .9035/40 but bears still hold strong cards
You know my views here, the market got overly bullish at 1.05 and is now getting overly bearish at .9000, when in fact we should be in range trading mode. Nevertheless, the recent bear trend has been impressive in its ability to defend resistance levels and until this changes, bottom-pickers will need to be careful with position sizes and keep stop-loss orders fairly tight.
The 4-hour chart is showing some very clear support levels at .9035/40 and resistance levels at .9180 and .9250, and these are the main levels to watch today (see chart).
Chinese CPI is the main risk event on the economic calendar.
EUR/CHF bulls starting to return
We have all read this story before and it certainly makes plenty of sense, but the trouble is that so many times we've had the false promise of a big bullish break that most of us have given up on it. Well it seems some of the bigger European hedge funds are having another go and have been steadily building longs over the last week or so. Not sure if they know anything or if there is anything to know :)
If you're having a losing run, try this ......
I appreciate all the kind words since I got stopped out of cable last week but seriously, that was basically the first trade I've gotten wrong all year so don't worry about me.
Those who have been struggling to get out of a losing trough should try this simple remedy. Firstly reduce your position size to the absolute minimum. Secondly, decide clearly in your mind what the important factors are before you enter a trade. Finally the hard part, you must wait, wait, wait until you have an 85% trade.
Rinse and repeat for 5 consecutive trades until you have regained some confidence. Then you can start to increase risk and frequency of trades.
Don't get too despondent over trading losses, its only money. The time to stop trading is if you feel yourself starting to gamble irrationally.
AUD/NZD: Double-bottom fails to form
The double-bottom on the short-term charts had a neckline at 1.1725 but this level has failed to hold (see chart).
This has slightly weakened the AUD bottom-pickers argument.
AUD/USD: Look for short-term choppiness .9035/75
I've started to increase my AUD/USD long position again, just in case a base starts to form above .9000/35. There is chatter in the market about good-sized bids near .9000 and prices have based on two occasions now near .9035. The AUD is getting some support from the crosses as well, with AUD/NZD trying to form a double-bottom and the AUD also trying to form an interim base against the JPY, EUR and GBP.
Nevertheless the down-trend is very strong indeed so keep stops tight if attempting to catch the falling knife!