Cable: wait for big dips to re-enter longs
There's a lot of readjustment going on in the crosses with GBP/AUD buying, GBP/JPY selling etc driving moves in every direction. I think that cable has made a major low below 1.5000 and this was reinforced by the double-bottom and neckline at 1.5000 and 1.5150.
I'm looking to re-enter longs on any decent dips back towards 1.5350.
EUR/JPY: Taking a bit of profit off the table
It is Friday after all and I think it will stay whippy so I've booked my profit in EUR/JPY at 127.90 and will hope to re-sell back above 129.00 later on. I'm still running my USD/JPY short trade.
Early Tokyo bashing Yen crosses
EUR/JPY is down 80 pips in the last 30 minutes and it looks like the long liquidation of Yen crosses is just getting started. The overnight low at 127.50 is the obvious bear target but selling rallies still the obvious play.
CHF: Still no sign of big asset manager moves
I'm somewhat baffled still by what's happening in the CHF and why the market is happy to sit on Swiss assets almost indefinitely and yet start bailing out of everything else. The CHF has strengthened against the other majors bar the Yen, and the only reason for this surely is creature habit; the market does what it's done before in the recent past.
I've been having a good run of things recently and I still stubbornly believe that I'm right and that the Swissy will weaken eventually (and when it does, it will be a very sharp fall). I'm looking at the GBP/CHF as a lower-risk way of playing this idea and I will look to buy this cross on any dips towards 1.4350.
EUR/JPY: Selling smalls here at 129.00
The nasty break lower last night is a sign of things to come I feel so I've taken a small short at 129.00 (which is where the big stops were placed last night and also roughly the 50% retracement of last night's collapse).
The next topside level to watch is at 129.50.
Time to be short USD
- USD/JPY is the lead pair here. Prices had already risen by over 30% from 76.00 and yet the market was trying to buy dips towards 100! Once again the market has gotten itself bullish at the top and I expect more downside pain here.
- USD/CHF: Following the USD/JPY lead and the Swiss Franc has been spared the mass exodus of asset managers that has befallen the AUD etc.
- Cable: Bullish technical set-up and the GBP is heavily oversold on a long-term basis against many other majors. I'd expect cable to find a medium term base now near 1.52 and start eyeing moves towards 1.60 at least.
- The EUR might struggle on some of the crosses like EUR/JPY once heavy long-liquidation emerges, but overall is headed higher I feel (although with less momentum that the cable for instance). I'd suggest a 1.2900/50 base that should hold even if the cross selling accelerates and the target is somewhere around 1.37ish.
- AUD/USD is getting smashed with some massive flows in the crosses. I still think somewhere around 92 cents is achievable but that dip will be a long term buying opportunity as the USD has little going for it.
AUD/JPY: Big clean-out underway, more to come.
I wouldn't be trying to pick bottoms in this pair anytime soon. Asset managers are caught the wrong side of this move and are trying to exit and the FX market is also positioned the wrong way. Turnover is huge and volatility will remain high.
The risk remains to the downside for all of the Yen crosses and the chat in the FX market is that the AUD still remains the most vulnerable.
Another good night for the good guys!
All of my trades worked out nicely and this business can really deliver highs and lows, but hopefully not too much of the latter!
Like I've been saying for the last few days, this is the beginning of a downmove in the JPY crosses so we can expect AUD/USD to still be heavy on rallies and if you're bullish on EUR/USD, you will still probably get some decent dips when EUR/JPY selling intensifies. The amounts going through the market were very large indeed and as we know with these big trends, the door is wide going in but can be very narrow when exiting.
It's Friday, and it's NFP day, so be extra careful out there.
Come on Aussie, just another 80 pips!
- I'm stuck with a bad AUD/USD position from yesterday at .9600 and being a stubborn old goat, I wore it down to .9430 today and will be very happy if I can get out of it around .9580 for a small 20 pip loss.
- On to brighter trades, I'm still long cable with a beautiful average entry level, and I've put an offer in at 1.5575, hoping for a nice early morning surprise.
- I'm also very small short USD/JPY, I'll sit on that for a while and see what happens.
Have a good night trading and I'll catch you tomorrow, when TGIF.
EUR/JPY: Starting to receive some market focus again and looking shaky!
The word is that the big professional players are starting to book profits and if this pair breaks and holds below 129.00, then watch out! Some of the positions in this pair are massive with reports of individual big macro funds sitting on upwards of EUR15 billion worth of positions. Good luck with exiting that in a fast market!
So why won't the CHF re-align just like JPY and AUD
I'm afraid that I don't know the answer but I simply cannot understand why the CHF hasn't undergone the same sell-off from vastly over-bought levels just like has happened in other currencies like the Yen and the AUD. I'm not taking the silly spike towards 70.00 in USD/CHF into account, as that was an anomaly, but surely we should see the EUR/CHF and the USD/CHF back at slightly higher levels? If anyone has any insight, please share!
What is the hedge fund market chatting about right now
- USD/JPY: "The BOJ is divided over whether to authorise a measure to quell bond market volatility"- this could be USD/JPY bearish.
- Cable: Break above 1.5415/25 seen as adding to bullish momentum.
- EUR/USD: Plenty of interest to sell on rallies especially near 1.3140.
- UBS: Maintain bearish USD/JPY and bullish USD/CAD stances.
Thanks to our hedge fund insider FXWW888 whose service will hopefully be starting next Tuesday. I'll be sending out details to those who've already registered their interest through the members section.
Cable looking bullish in early London trade
The proud old English pound is strutting her stuff in early European markets, up against most of the other majors and especially so against the AUD. Don't be too surprised by any of these moves, remember that GBP/AUD has fallen a long way and we are currently experiencing a bog standard retracement.
If cable can break and hold above 1.5600 in coming days then I will be declaring a base in place and will start to load up for a good old-fashioned macro short-squeeze :)
AUD still in free-fall
- AUD/USD looks set to test important weekly support at .9390.
- EUR/AUD and GBP/AUD are well above their break-up levels from this morning and neither pair is showing any signs of tiredness.
- AUD/NZD is below 1.1950 but is lacking momentum so more sideways trading is favoured here.
Remember that most 'silly' extremes seem to happen during Asian trade and we don't know they were extremes until weeks later.
AUD/JPY: Technical support levels looming
- The 38.2% retracement of the entire 3-wave up-move from 74.50 to 105.50 comes in at 93.60.
- 2 separate daily spike lows come in near 93.00.
These levels are sure to attract some profit-takers.
EUR/AUD: Don't expect any big retracements
Strong uptrends like we are currently witnessing in EUR/AUD seldom suffer sharp retracements and I think the most that the bears can hope for is a period of consolidation.
If you think it's getting overbought, then stick a 'silly' offer in somewhere 100/150 pips above the market and then look to book your 200/250 pip profit on dips when consolidation sets in.
Risk trades staying heavy in early Asian trade
Not much bounce in the AUD/USD since it broke below .9500 and further losses still look likely. I'm still running a small long position from yesterday at .9600 and I will either off-load on any relief rallies or try to buy some more on deeper dips for a longer term play.
I'm still running a long cable position and this pair looks very bullish to my very biased eye. USD/JPY has been fairly quiet despite some volatility on the Nikkei but the short-term downtrend is in control for now.