Weakness in EUR crosses main factor overnight
EUR/AUD, EUR/JPY and EUR/GBP are all a bit weaker than yesterday morning but the trend is not particularly strong. I think it's best to play a bearish EUR strategy on the crosses by selling intraday rallies and covering on deeper dips. I also remain of the opinion that any falls in EUR crosses are more likely to come about through higher AUD/USD, higher GBP/USD, lower USD/JPY rather than a dramatically lower EUR/USD.
These markets are going to start slowing down as we enter July/August holiday periods in the Northern hemisphere, so we need to take that into account when planning any major medium-term positions.
Good luck today.
USD/JPY: Should be re-named Jekyll and Hyde
Overall I think we go lower in this pair and we will probably see levels back towards 93.00 in coming weeks, but it won't be in a straight line.
- The crosses are giving mixed messages; AUD/JPY is trying to form a strong technical base near 89.50 but EUR/JPY and CHF/JPY look soft.
- Fundamentals seem to be USD/JPY bullish (Fed tapering, BOJ expansion) but the market is long.
- Plenty more Jekyll and Hyde trading ahead for USD/JPY.
AUD/USD: Strong resistance expected at .9325
I know that I'm boring you to tears with my bullish AUD/USD story but I think this market is way overly bearish and way oversold. Nevertheless we must keep good order and accept that the bears are still in control of this market. Next resistance is at prior lows near .9325 but I did note that FXWW888 referred to large trailing stops around that level.
EUR/USD: Still stuck in classic sideways trade
Many have tried but nobody has yet convinced me that the EUR/USD is in anything but sideways trade (see chart) with weekly trend-lines coming in now roughly at 1.29/1.34. Of course it will eventually break out of this range but for now there are much more interesting pairs elsewhere. The shorter-term charts suggest a tighter 1.3050/1.3250 range and as we are currently right in the middle of this range, I'd sooner trade NZD/CAD (and that's saying something!)
Actually, much stronger AUD/JPY support just below 89.50
I posted this chart on Twitter a little earlier, and thanks to FXWW303 for the heads-up. (See chart) for the very strong medium-term technical support around 89.30.
There are some who claim that the strongest technical signal of all is the trend-line convergence with the 61.8% retracement.
AUD/JPY: Modest support at 89.50/60
The fall in stockmarkets across the region has really caught the market off-guard and the Yen crosses have been spanked. AUD/JPY support on the hourly chart close by at 89.50/60 (see chart).
AUD/USD down 50 pips as Chinese stocks turn lower
Nice call from FXWW303 as AUD/USD turns sharply lower alongside Chinese stocks. I'd expect these current levels to hold around but I'm not feeling confident at all given this risk aversion across all markets.
AUD/USD: Hedge fund market reporting trailing stops above .9310
Our hedge fund insider FXWW888 is reporting trailing stop-loss buy orders from hedge funds starting above .9310 through .9340.
EUR/JPY touching short-term down-trend line
USD/JPY has edged back toward 98.00 and AUD/USD is nearing likely support at .9230 as the USD again takes control during Asian trade.
EUR/JPY is trading towards its short-term bearish trend-line (see chart) and I'm sure the EUR bears out there will be paying attention.
Edit: My mate James Langlands from FX Charts reckons that EUR/JPY is a better risk-reward sell around 129.10.
EUR/JPY: Prefer to play it from the short side intraday
The EUR crosses, like EUR/GBP and EUR/NZD, look quite bearish to me but we don't often get much value during Asia by trading these pairs. Best to play the bearish EUR card through EUR/JPY during Asian trade, and I'd suggest a 127.00/128.50 range with a definite bearish bias (see chart).
Cable: Buying dips still my preferred strategy
I'm building a long-term long position here and I'm looking for nice dips to add on. The 4-hour technical outlook (see chart) is bullish in my view and we are currently in a retracement phase which could possibly take us back towards 1.5290/70.
EUR/GBP could well prove to be the key here but getting timing right is very tricky on this cross. I still believe that we will fall back below .80 pretty soon on the cross and that's the core reasoning behind my cable trade.
USD/JPY: Very difficult to trade, wait for big swings
USD/JPY is brutally hard to trade at the moment and best left alone in my view, unless of course you have the magic timing happening. The fundamental set-up looks bullish with rising US rates, tapering QE by the Fed, and Japanese expansionist monetary policy. But, the market is long and if risk sentiment turns sour again then the JPY will strengthen across the board.
I think its a case of sitting and waiting for some obvious risk-reward trades and I simply don't see any at the moment.
AUD/USD: Position lightened a bit but I'm still bullish
It was a bit of a sleep interrupted night and we all know what's it like to be nursing a position back to health :) I took a bit more risk on by adding at .9160 but thankfully the bids were strong enough to hold and we saw a nice relieving bounce. I'm still strongly of the view that the AUD sell-off is 50% driven by speculators (certainly there are international asset managers bailing out of Australian markets, no doubt) and I think too many of these speccies are entering the market at the wrong levels. I'm expecting a minimum bounce to .9800.
Nevertheless momentum is bearish and there will be further pushes lower so it makes good sense to lighten on rallies, and get some better sleep as well. I'd expect support now around .9220/30 and upside resistance at prior lows near .9325/30.
Good luck today.
USD/JPY: Cutting my small short position at break-even
I had a small short position from last week in USD/JPY at 97.87 which I've just cut at break-even. As I said earlier, I think this pair will swing around violently and stuff-up as many traders as possible so I will only enter on any big intraday swings.
Hedge funds still selling AUD, but they get it very wrong sometimes too
Our good friend Milan over at Order Flow Trading is reporting that hedge funds are still selling the AUD, and I have no doubt that he is right. But some of these hedge fund guys are dreadful traders and they get it horribly wrong as well (with other people's money of course). Many of them had huge long positions near 1.0600 and now they are turning around and going short 15 big figures lower!
They may well be right and the AUD/USD is really going to zero, but take a minute and look again at the US debt situation and the amount of money they've been printing. Now do you really want to be long USD? If AUD/USD turns higher and breaks above .9260 then there could be a bloodbath of short-covering. Talking my position of course as always, but if I don't... :)
AUD/USD: Running into very solid bids but no big bounce yet
The bears are smelling more bull-blood as they try to nullify a barrier option at .9150. There have been 3 brief attempts so far, all with lows near .9153, but the protector (rumoured to look a bit like a giant panda) is holding firm. In for a penny; I've increased my long position at .9160 with a fairly tight stop still below .9120.
Cable: Bids filled at 1.5360, technical support at 1.5290/70
The double-bottom is still the main feature on the 4-hourly (see chart) but the market is bearish at the moment so a test of a 61.8% retracement at 1.5290 and a prior pivot at 1.5270 looks feasible. I will be buying this dip as I attempt to build a medium-term long position.