EUR/AUD: Testing highs from October 2011
The power of reversal formations is very evident in the AUD and NZD crosses as these reversals were foretold in EUR/AUD and in GBP/NZD by very clear indicators. Its too late to start chasing it now, but I've found over the last 13 years trading my personal account, that I make all of my money by waiting for these big reversals. Unfortunately I didn't catch the whole up-move in EUR/AUD but I shouldn't be greedy.
The AUD/USD is going through another weak leg at the moment and has broken through the .9500 barrier with ease, next target .9390. Cable might drift a bit in sympathy with the AUD/USD but remember that this is a cross move so dips are for buying in the cable.
AUD/USD: Talk of barrier protection at .9500
The overnight lows were around .9510 and we are testing those levels again at the moment. There was talk overnight of a barrier at .9500 and price action would seem to confirm that. The overall bear target for this leg of the downmove is at .9400.
USD/JPY: Could be back at 90 in a few weeks time
This pair looks really really dangerous to me, just have a look at the weekly chart and its vertical rise from below 80.00; a 38.2% retracement would only have it back at 93.50! The Nikkei looks susceptible to further falls and price action suggests that if it does fall then it will be fast. The Yen crosses have been looking wobbly for a few days now and I think a break below 129.00 in EUR/JPY could set off some serious selling. PM Abe said nothing to encourage the Japanese bears and with NFP due tomorrow, we might see some long-term positions start to book profit.
I'm running a small short position here and hoping desperately for an intraday bounce to add some more. I've been wrong plenty of times before but something smells 'off' in USD/JPY.
Cable: Buying dips preferred during Asian session
The break above 1.5375 technical resistance opens the way up for further gains in the GBP/USD. The GBP is showing plenty of bullish promise on the crosses, with EUR/GBP looking to have plenty of scope to fall back towards .8430 and of course the GBP/AUD bullish momentum has really picked up.
The short-term technical target for cable is at 1.5600 and I like the risk-reward profile of buying near 1.5370 with stops below 1.5320 looking for 1.5570.
JPY and GBP make strong gains against AUD and NZD
GBP/AUD is testing weekly resistance at 1.6180, EUR/AUD is eyeing our 1.38 target and AUD/JPY has broken below 38.2% support at 95.50.
- GBP/USD: Sticking with my long position here, support should now develop near 1.5370 and the target is recent highs at 1.5600.
- AUD/USD: I'm still running a small long from yesterday at .9600 but this is the wrong position; hoping to exit on any intraday rallies. Talk of barrier protection at .9500 might support on the session.
- USD/JPY: Still small short here and I think this pair shows potential for a big downside cleanout.
- CHF: Is gaining strength alongside the Yen and best left alone in my opinion.
- The EUR and the USD are bit players in these big cross moves.
AUD/JPY: Back above the Fibo after breaking 20 pips below
- As always with these big levels, I find it safer to give them a little bit of error just in case of very tight stops. The market traded 20 pips below 95.50 but is now back above there so I do not consider the level broken just yet.
- Large expiries are noted in USD/JPY later today at 100.00 so I would expect the spot price to not deviate too far from there before 10am NY time.
Cable: Remember big level at 1.5375
Monday's highs are also the 61.8% retracement of 1.5605/1.5010 and if that levels can hold again then we could see a sharp turnaround (with much depending on what happens in GBP/JPY as well).
AUD/USD: Taking a small long position at .9600
I think the AUD/USD is oversold and the same people who were bullish at 1.05 are selling at .96.
I've taken a small long position at .9600; AUD/JPY support at .9550 should be solid but the fact that EUR/AUD resistance has broken means that I will only take a small position.
Interesting to note that the AUD seems to be getting sold off on a Goldman Sachs report that the RBA will cut twice more this year. Firstly, ignore everything these guys say. Secondly, they were a reported big buyer earlier today. Go figure!
AUD/JPY: Touching Fibo support at 95.50
The 38.2% retracement of the big upleg from 79.50 to 105.50 comes in right on current levels at 95.50.
Focus stays on USD for now but Yen crosses look bit wobbly
Yesterday I heard that one big professional trader was booking profits from his long GBP/JPY trade and this has got me thinking. Perhaps we've taken for granted that the Yen will stay weak for a long time but we shouldn't forget that there are big speculative positions in the market, all pointing the same way. If EUR/JPY were to break below 129.00 and AUD/JPY were to break below 95.00, the whole complexion of the market would change.
Definitely worth keeping in mind.
USD/JPY: Looks soft heading into European open
I'm running a small USD/JPY short which I wish was larger. The market is trying to buy dips at the wrong level, which is usually a recipe for further losses IMHO. I'm hoping for some sort of rally to increase my position on, but then again it's NFP week so we need to be careful there as well.
JPY: Growing expectations ahead of PM Abe's speech this morning
One other important risk event to take note of is the planned speech by PM Abe, which I believe is happening at 11am Tokyo time. This is not an official government event, which suggests that the PM is more likely to stick to a very general story rather than policy specific.
One of the Bank of America analysts reports the possibility that a 'wage growth' goal may be announced, but again specifics are probably going to be very light on.
I'm not sure what to expect from this speech but its best to be aware that its happening and position accordingly.
Cable: Very heavy turnover reported overnight; 1.5150/1.5370 range favoured
- At least 3 of the big banks are reporting very heavy turnover in the cable overnight and the surprising thing is that it hasn't moved.
- Longer-term players were also reported selling GBP/JPY, booking their profits after a very profitable ride.
- EUR/GBP resistance at .8590/00 remains intact.
I think we may be in for a big move in the GBP very soon but I'm not sure at the moment which way. I'm small long of cable in expectation of a 1.5150/1.5370 holding range but once this breaks we could see a very sharp move.
USD/JPY: Selling rallies towards 101.00 preferred
- Prime brokers report that short-term speculators are building long positions around 100.00.
- The Yen crosses remain reasonably well supported but macro players are eyeing big levels like 95.50 in AUD/JPY and 129.00 in EUR/JPY.
- Ranges expected to hold ahead of Friday's NFP.
Personally I feel that a 300 pip dip after a 30 big figure rally is not yet a 'dip' and I prefer to sell rallies for a test of China's dnt base (if it's still live that is) at 97.00. I have solid short-term resistance coming in at 101.05/10 and that's where I'm hoping to increase my risk.
AUD/NZD: Range traders have done well recently in this pair
The non-sexy side of FX trading is usually the most profitable, not aiming for 25 big figure moves but chipping and putting inside tight ranges.
AUD/NZD has offered such opportunities in recent weeks and a 1.1950/1.2050 range looks like a reasonable safe bet?
EUR/AUD: Stalls again at 1.3600; contrarians take note!
The market showed just how bearish it is on the AUD, giving back all of its gains quite quickly during Asia and London trade.
However; EUR/AUD stalled again just ahead of 1.3600, AUD/JPY is nearing its 38.2% retracement level at 95.50 (chart in members), and the AUD/USD downtrend has started to flatten out.
Contrarian traders (that's me!) should keep a sharp eye on the AUD for some good risk-reward entry levels.