EUR/JPY: Going short again near 130.90, tightish stop
- Last week's sell-off might be an indication of more to come.
- USD/JPY peaked back above it's 98.90/00 break-up level but hasn't sustained this move.
- EUR/USD is trading towards upper-end of recent ranges.
- EUR/JPY is near 61.8% retracement of 133.80/126.15.
I'm not overly confident this time around so I'm running with a tight-ish stop above 131.50.
USD/JPY: Bulls need to reclaim 98.80
The big breakdown level in USD/JPY last week was at 98.80 and there was panic selling once that level broke. The bulls will be keen to reclaim this level and consolidate back above there.
EUR/USD: Still too hard for me, no idea where it's going
- Strong demand related to EUR/AUD flow but this is probably mostly done by now.
- EUR/JPY stop-loss selling has off-set the EUR/AUD buying to some degree.
- EUR/GBP looks to have a top in place just below .8600.
- Technical picture suggests that the short-term extremities for EUR/USD are at 1.28/1.33.
I cannot see any reason to trade EUR/USD at the moment especially given the big flows in AUD and JPY and the stronger technical indicators from the GBP.
USD/JPY: Buying dips favoured in short-term
- AUD/JPY; solid demand reported on dips from Japanese accounts.
- EUR/JPY; break above 129.50 has neutralised the short-term downtrend.
- USD/JPY; very solid demand reported earlier below 97.80.
Buying dips looks like the safer play in the short-term with an obvious target back at 100.00.
AUD/USD back near .9400 again; EUR/JPY still with bit of topside potential.
- AUD/USD: The first attempt at cracking strong technical support at .9390 failed earlier this morning and it looks like we're about to have another crack once Europe gets up and running.
- EUR/JPY: Triggered trailing stops above 129.50 this morning and is still hanging around this level suggesting to me that we might have another try on the topside first.
With USD/JPY looking reasonably well supported, I'm thinking we might have a session or two of bullish USD moves, at least I hope so as I'd really like to reinstate my long position and buy dips in the cable back towards 1.5350ish.
AUD/JPY: Solid buying interest below 92.00
Some of these big flows seemed to have reached an equilibrium point and supply/demand is starting to even out. The heavy AUD selling against the EUR is now being balanced by heavy buying of AUD against the USD and the JPY. This will mean that the heavy volatility of late last week will gradually start to reduce from here, so make the best of it while you can!
It's a holiday here in Australia today so any movements from here will have to come from the Japanese market. I'll check back in a little later for the European open.
EUR/JPY: There go the stops!
No surprise to see plenty of trailing stops above 129.00 and 129.50 and they have all been triggered in typical early morning Monday trade.
I'm still looking to sell any rallies towards 131.00, or maybe better to sell USD/JPY rallies? Let's see how it develops.
AUD/USD testing lows from October 2011
The AUD/USD has gapped 100 pips lower on the back of poor Chinese data (and the fact that everyone is desperate to sell) and has taken out an option barrier at .9400. Strong chart support at .9390 is still holding but there isn't much bounce yet, always a bearish sign.
I'm leaving it alone waiting for some exhaustive dips towards .9250 before I start buying.
AUD: May be heavy on Monday morning after Chinese data
- Chinese trade data showed a marked reduction in activity and this could give the bears another reason to sell AUD on Monday morning (as if they need another one!).
- EUR/AUD rose by 600 pips last week on the back of one big buy order.
- AUD/USD has stalled at .9430 on two occasions and there were reports that a particularly powerful Asian central bank was buying there.
- AUD/JPY continues to get hammered but some of the big Japanese investors were noted buyers on Friday afternoon blow 91.00.
EUR/JPY should be key pair this week
The EUR was pulled in different directions by large flows last week; on one side there were reports of a EUR15 billion buy order against the AUD whilst on the other side there were reports of 10billion+ in stops below 129.00 in EUR/JPY. Little wonder that AUD/JPY took a bashing at times! I'm presuming that much of these flows are already soaked up and now it becomes a matter of picking the right levels in the volatile pairs.
- EUR/JPY: Break and weekly close below 129.00 was a bearish event but the market closed on Friday with a very bullish tone. There are certain to be heavy short-stops now above 129.50 and I wouldn't be surprised to see these triggered, perhaps even on Monday morning? Nevertheless the trend is still bearish in the short-term so I'm looking to re-sell on any exhaustive rally towards 131.00.
- GBP: I'm bullish and I bought a small GBP/CHF position on Friday in line with this view. Cable may dip back towards 1.5350/1.5400 depending on what happens to the USD early next week but the overall flow of funds seem to be GBP-positive and I'm expecting some big gains for the pound in coming months.
- AUD: Asset managers are still trying to get out of over-exuberant long Australian-asset positions and I suspect that the AUD still has quite a way to fall on the crosses. I will stress that I think the recent AUD weakness will remain primarily against the crosses (GBP, CAD, SGD etc) rather than against the USD and I remain a buyer of big dips in AUD/USD.
Good luck.
Volatility great for trading, but you must get your timing right
Depending on which way you look at it, these markets are either very dangerous or they offer tremendous swing trading opportunities.If you can get onto the first move and then start riding the swings, that makes life very easy (and profitable). On the other hand, if you miss the first move and then try to jump on mid-stream, trading can be very tricky indeed.
I think these markets are set to continue for some time, based on the 'volume' reports I'm getting from prime brokers. Real money flows are exceptionally large and trailing stops from macro players aren't far behind in terms of size.
And one other thing, actual technical levels won't work as well in these wild markets but we can still look to technical analysis for directional indications.
Should be an interesting week!
Good luck in the great NFP lottery
That's me done for the week. Don't worry about missing out on any of the free trials, we will get you organised early next week. As you can see from the info, its absolutely brilliant; no wonder these hedge fund guys get paid the big bucks :)
Anyway, we will do what we can to level the playing field.
The Yen crosses look like they are all going to zero in the next 5 minutes, so I guess a base must be coming up soon! Good luck to all those partaking in the great NFP lottery and don't risk too much, there will be plenty more clear opportunities in coming weeks.
No obvious risk-reward trades; booking USD/JPY profits at 96.40
I'm still running a small USD/JPY short but as a typical superstitious trader I feel that my excellent run of recent days might be coming to an end (my profit target at 95.50 missed by 8 pips earlier today and then we got a 170 pip bounce). When you're really in the zone (read lucky) those profit targets get triggered!
I'm booking my profit here at 96.40 in USD/JPY, it was only a small position but 360+ pips still add up to a nice trade and I'm now position-less and likely to stay that way until next week (I usually sit out the NFP lottery).
Some trades which will tempt me are:
- Any dips towards 1.5400 in cable.
- Any dips towards .9300 in AUD/USD.
- Any rallies back to 129.50 in EUR/JPY.
If they don't happen then I will stay out.
AUD: Goldman Sachs and Blackrock report overwhelming bearish conviction
Two of the more recognised names in the financial space are saying that basically 100% of everyone they deal with is bearish AUD, but not all are short yet.
Tells me that we will have a few more down sessions before the inevitable short-squeeze!
Looks pretty steady at .9510 in early Europe but should get a lot busier around the time of the NFP. I still fancy a .9400/.9750 holding range.
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If it's volatility you're after....
USD/JPY took out stops below 95.75, traded to 95.58 and then gets paid at 96.75; definitely not for the faint hearted!
I still prefer the short side here but be ready for 200 pip swings either way and keep positions small and nimble.
USD/JPY: Stops targeted below 95.75
Dealers tell me that latest run lower in USD/JPY was to trigger stops below 95.75 before it immediately bounced back. My take-profit order in USD/JPY missed by 8 pips :(
AUD/USD: Back below .9500 in thin trading conditions
The story doing the rounds is that one of the big local banks is working through a very large AUD sell order, primarily against the EUR, and that this order may take weeks to finally execute. Hence the marked weakness in the AUD during the Asian trading session. AUD/USD is back below .9500 and I'm sooo grateful that I got out of my stale longs on last night's rally. Often the best trades from a psychological perspective are the loss-minimisation trades.
I'm looking to a .9400/.9750 trading range during this wide consolidation period.