AUD/USD: Taking a small long position this morning
US yields eased lower again on Friday after a big fall on Thursday, precious metal prices remain very steady as indeed to commodity prices. These are all good signs for the bullish AUD/USD case and with most of the big flows now having dried up, I'm going to edge into a medium-term AUD/USD long trade.
I've gone long at .9570 and if a base seems to be forming at .9550, then I will look to increase my position size. My target is 1.50! Joking, but I think we will see prices back above 1.00 pretty soon with lots of trading opportunities thrown in.
Quiet start to interbank trading week; levels to watch are....
Not much happening so far this morning and we are still trading around NY closing levels from Friday.
- Interbank dealers have a bearish bias in USD/JPY this morning which suggests that order books may be slightly skewed to the downside. Important support in my opinion lies at 93.40/50.
- AUD/JPY still hanging around the important technical level at 90.00 (see below).
- EUR/GBP, stop-loss sell orders below .8465.
- AUD/USD, bids were reported on Friday to be very solid near .9550.
AUD/JPY will open the week at a very important level
The inverted head and shoulders (see chart) on the short-term charts has a right shoulder at 90.00 and that is exactly where the market closed last week. If this level can hold (and I hope it can as I'm long), then we should see a sharp rally. On the other hand, there could be tight stops just below there in thin Monday early-Asian markets but they will probably all be done and dusted before the retail market opens.
USD/JPY should find strong support at 93.40/50, which was the launch level immediately after the big BOJ announcements at the April meeting. AUD/USD actually looks and feels a bit heavy, so if AUD/JPY is to race higher then is will probably be via the USD/JPY leg.
EUR/USD started to feel a bit heavy towards 1.34 so we may get some snail-paced range trading between 1.32/1.34.
You're not going to kill this server as easily
The new server is in place and I'm very much hoping that we can now handle the barrage of traffic that hit us last week.
The 2 FXWW strategists FXWW888 and FXWW303 are filling the Twitter airwaves with unbelievably good insights and it seems I may have under-estimated the demand for credible, high-quality content; won't make the same mistake again!
The long-anticipated FXWW funding program is also due to start in the next few weeks, starting with up to $40 million in total positioning, and I'm convinced that the next wave of professional FX traders (the new Soros, Tudor-Jones, etc) are reading this post right now. This will be a beginning-to-end program; you trade and fulfil basic criteria, we give you some basic start-up funding, we then 'umbrella' you into a licensing program, and set up your business structure to manage retail and institutional funds. You then take over the world of FX trading :) Too easy! Don't knock me over yet with applications until I'm ready to go as I'm already weeks behind on the other programs :(
The technical analyst mail-out is waiting on one simple sign-off, so please be patient.
Now, where's the market headed? Keep a sharp eye on 303 on Monday morning's as he sometimes gets good trade ideas for the early-open brigade.
Traders taking a well earned rest today
I have a feeling that Europe and NY sessions might be similar to what we had today; one sharp move in one direction and a slow unwind thereafter. Most traders, myself included, are very tired after a busy week and looking forward to the weekend.
I'm small long AUD/JPY and looking for deeper dips towards .9000 to add to my position.
EUR/GBP: Much more likely to fall in medium/long term
Not that I'm recommending that anyone take a position in this 'tortoise' of a pair, but if you do see any technical set-ups which favour the bearish side then I think its worth consideration.
One professional trader gave me a scenario recently which could easily come to pass. The ECB will take over the stress testing of regional European banks early in 2014. He expects many banks to not only fail these tests but also fail completely.
This will lead to a massive move of real money out of Europe and into the GBP and CHF in particular. He sees EUR/GBP below .7500 by early next year and more controversially, he sees EUR/CHF back at 1.10.
Quiet conditions after earlier flurry
The Yen crosses have quietened down after the earlier flurry and I've used this morning's dip to start building an AUD/JPY long position. I'm hoping that prices stay above 90.00 now.
Looks like it will stay quiet now until Europe opens.
AUD/JPY: Looking to buy near 90.00
This morning's resistance levels in the Yen crosses held nicely but I'm looking for a more medium term play here and will buy AUD/JPY soonish, hopefully near 90.00.
EUR/JPY: Intraday bears can try selling at 128.10 with tight-ish stops
As I mentioned below, USD/JPY is likely to tend back towards 95.00 throughout the course of the day. EUR/JPY has some decent technical resistance on the hourly chart at 128.10 (hourly highs and a 50% retracement level). Those looking to play the bear card intraday can try selling near there with a tight stop (30/40 pips in these market conditions).
Permission please to scream and be generally annoyed
AUD/JPY in particular was screaming at us that a base was close yesterday. It always looks it's absolute worst right at the bottom and I'm pretty sure we saw an important base happen yesterday. Presuming the big hedge fund clean-out is done, I think we can get back to normal market conditions and start selling the Yen fairly aggressively.
As our hedge fund insider @FXWW888 reported yesterday, there's a big digital option rolling off in USD/JPY later today, with a pay-out of $10 million, so we can expect this pair to be trading pretty close to 95.00 at around 10am NY time.
Cable continues to look very strong and I wouldn't be at all surprised to see prices near 1.6000 in coming days. That will really stuff the bears up (and probably be the short-term top!).
Regardless of twice missing good dip-buying opportunities in the AUD crosses this week :( I still have to admit that these are really great markets to trade in :)
Good luck today and TGIF.
AUD/JPY: Solid bounce suggests that base mightn't be too far away
I'm still of the view that the AUD sell-off against the EUR, JPY and USD is overdone and that we will eventually get a decent bounce. Not sure that the base has happened just yet but pairs like AUD/JPY, which has bounced almost 150 pips off earlier lows, does suggest to me that a base will form fairly soon.
Catch you tomorrow.
Good to see The Guru has lost none of that magic touch
One of the best day-traders going around, and you can follow him on Twitter at https://twitter.com/fxww303 where you just missed an 'easy' 60 pip USD/JPY trade :) Nothing easy about USD/JPY as we all well know! "The Knowledge" can also be followed on https://twitter.com/FXWW888 and he's just reported that hedge funds are buying EUR/GBP (he knows it almost before they know it themselves :) ).
You will need to apply for access as they are protected feeds and then simply send me your Twitter address via email and I'll get them to permission you. Please be patient if it takes them a while to grant you access, these are very busy boys especially in last few days.
USD/JPY: Got my bids lined up at 93.50
Its not that I'm bullish really, just that I think we are in swing trading markets and as it's already fallen 100 pips today, we will probably get an intraday reversal at some stage. Plus as I mentioned earlier, 93.40 was the first level the market halted at after the April BOJ decision.
All the current Yen strength is due to profit-taking from macro funds and as such, we will eventually reach an equilibrium point.
EUR/CHF: Headed back towards buy zone, or?
I know I was all bulled up on USD/CHF a few weeks ago but at least I can say in my defence that I sensed the error of my ways on time and managed to get out at a very healthy level.
Now that EUR/CHF is headed back towards 1.2200, should we be buying this 'cheap' dip or should we be avoiding? I didn't even mention going short, as it's hard to imagine anyone going short ahead of SNB bids but I know of at least one very experienced trader who thinks that EUR/CHF will be back at 1.10 by mid next year (on the back of a renewed EZ banking crisis).
I think its probably worthwhile buying dips towards 1.2200 in the hope that the bull trend can re-emerge, but my confidence is slowly eroding.
EUR/AUD: If you're looking for a bearish entry level...
This pair has come 20 big figures and will soon run out of steam in my opinion. I think EUR/JPY is susceptible to a sharp profit-taking sell-off but the AUD has done most of its bearish work already.
Therefore I think EUR/AUD may be a good sell somewhere, looking for a move back towards more mid-range levels at 1.34/1.35.
The level I'm looking at is near 1.4350; I will sell smalls there and if a top starts to form then I will look to sell more.
Apologies for site downtime, new server on order
I'm sorry that the site keeps crashing at the busiest times, new server should be in place by Monday and that should solve the problem.
Nikkei over 5% lower; looking for deep AUD/JPY dips intraday
Like I said yesterday, large macro hedge fund is exiting positions across multiple markets and this is having a huge impact across various markets. The Yen crosses are being most impacted in the FX space.
Being a typical contrarian I'm looking at buy opportunities in AUD/JPY, but I will need a premium entry level given this volatility.