AUD/JPY: Down 125 pips from this morning's open
This pair is really starting to follow technical rules and is worth following for further signals. This morning's open at 99.50 was at a very strong resistance level and we have fallen 125 pips now from there. The Australian stock-market is almost 2% lower and the Nikkei has gone from +3% to flat in the last 45 minutes.
Time for small and nimble positioning in FX markets
Yesterday's moves showed us yet again how unpredictable the markets can be and that big moves in either direction are very possible. I've greatly reduced my overall positioning (now only moderately long USD/CHF) and I think it's a good time to sit back and wait for extreme spikes to give trading opportunities.
Australian shares extending their losses
The local sharemarket is down by 1.75%, not quite the big 7% fall that Japan had yesterday albeit after an 80% rally since November! The AUD is struggling alongside the sharemarket and is trading almost 100 pips lower from this morning's highs.
AUD/USD trading quietly near session lows
The fact that short-term trend-line resistance at .9750 held so impressively will be encouraging for the bears but they should also not forget that there is major technical support at .9600 which was tested yesterday. We are right in the middle of this range at the moment and its pretty hard to have any sort of bias.
USD/CHF: Cutting 1/2 my position at .9710
I've got around 350 pips on this trade but after yesterday's big risk-off move, I'm not as bullish as I was. I think we may get some .95/.98 range trading for the next week or so and I think it's probably a wise move to book some profit and become more nimble.
AUD/USD: Trendline resistance holds nicely
The trendline resistance on the 4-hour chart held really nicely near .9750 and the AUD/USD has slipped quickly back towards .9700. USD/JPY has popped up to 102.35 but I'm not reading much into any of these moves, just the usual noise in thin early-Asian markets.
Look to Yen crosses for leads all over the market
The next week or so of trade is likely to be characterised by what happens in the JPY crosses. Yesterday's events suggest to me that the immediate danger is to the downside in crosses like AUD/JPY and GBP/JPY and so I try to position myself accordingly.
- USD/CHF: Might be toppy now near .9800 with scope for a fall towards .9500 in next week or so if Yen crosses collapse and USD/JPY trades back towards 98.00? I am looking to book some profits somewhere in mid .97's, depending of course on how the Yen crosses are looking.
- EUR/USD: The EUR is playing second or even third fiddle at the moment and will likely stay in a 1.2750/1.3000 range.
- Cable: Certainly felt very heavy yesterday and if the Yen crosses break lower then I'd expect to see cable back below 1.5000, especially with market seemingly very keen to be short sterling.
- AUD/USD: Same as above, if AUD/JPY gets hammered in a risk-off environment than AUD/USD will be trading below 95 cents in all liklihood.
In short, I think the Yen crosses are the key in coming days.
AUD/JPY: Touching strong technical resistance
- Yesterday's breakdown below the consolidation pattern accelerated once 99.50 was broken; we are now back at the same level.
- The 61.8% retracement of the fall from 101.00 to 97.30 comes in around 99.50 as well.
If you're bearish, this is a good technical entry level.
I'm sticking with USD bullish view for now
I used the bounce in cable to get out of my long position, only incurring a 50 pip loss which is a lot better than looked likely yesterday afternoon. Now I'm just sitting on my long USD/CHF position and although I'm still bullish, I'm certainly not nearly as bullish as I was yesterday.
I'm also pretty disgusted with myself as I didn't re-sell USD/JPY above 103.50 yesterday morning even though I'd been preaching that this was the no-brainer trade; obviously I'm one of the no-brainers!
AUD/USD halted its recent slide at .9600 again, and the bears will be a bit worried by the possibility of a double bottom. And what about AUD/JPY yesterday? Fell 250 pips and then rallied 200! That's definitely one pair which doesn't know where it wants to go.
It's Friday so I can't see myself getting too involved today, especially after the worry beads got such a work-over yesterday.
USD/CHF also getting hit hard; technical support .9570/.9610
The speculative market was also quite long of USD/CHF and the risk aversion plays across all markets haven't left the Swissy untouched. Technical support levels for USD/CHF are at .9610 (38.2% retracement) and .9570 (previous highs).
Risk sentiment recovering: Best wait for European markets for confirmation
I'm really not sure what to make of today's move on the Nikkei, is it the start of a big sell-off or merely a technical over-reaction. I tend to think its the latter but best wait and see what European market do before committing too much to any one trade.
AUD/USD has bounced off daily lows near .9600 and USD/JPY should find resistance now near 102.25.
AUD/JPY: Smashed to 97.50
We've been watching it all day and I wish I'd been clever enough to sell the break, but I wasn't. Trade on the Nikkei was halted limit down a little earlier and AUD/JPY is trading almost 200 pips lower on the session.
This may all be technical selling on the Nikkei and may not roll over into overseas markets but the charts on S&P futures for instance look very dodgy.
Nikkei getting hammered, USD/JPY nearing important support
The Nikkei has had an extremely nasty reversal, now almost 4% lower after being in positive territory in early trade. The Yen crosses like AUD/JPY led the way this morning but USD/JPY has now taken over the lead and is falling quickly towards important support near 102.25.
AUD/JPY: Next support breached, 98.70 next bear target
AUD/JPY is the mover-of-the-day it seems and after one support level at 99.45 was broken earlier, further daily lows at 99.30 have also been breached. Next target is a daily low at 98.70.
AUD/JPY selling emerges out of Tokyo
Recent lows at 99.45 have been breached after some quite heavy selling out of Tokyo. I really should have re-sold USD/JPY above 103.50 :(
AUD/USD feeling bit oversold intraday?
The AUD/USD fell below .9650 on quite heavy selling from model funds but it has been unable to print fresh lows despite quite disappointing PMI data out of China. I certainly wouldn't be going long anytime soon but if you're looking to sell, we might get better intraday levels back near .9680/90.
USD shorts: When's a good time to panic?
I've got a long cable position which is well out of the money and I know of a few other traders who are sitting on long AUD/USD positions and we are all asking ourselves the same question; when should we panic?
The market is undoubtedly very bullish on the USD and I don't think this will change any-time soon but I'm still very much of the view that the EUR and GBP crosses are likely to trade higher so big dips in cable and EUR/USD are buying opportunities. AUD/USD is a slightly different animal in my view, as many asset managers are still very long of Australian assets and therefore opens the A$ up to further downside moves. That said, I'd be surprised if the AUD/USD trades much below .9550 in the short-ish term.
My view is that USD/CHF will trade aggressively higher, EUR/USD will range trade probably between 1.25/1.30, Cable will also range although we just gotta find the parameters, and the AUD/USD will find another 10 big figure range for the next few months, probably .92/1.02 or something like that. USD/JPY should be toppy near 104 but with corporate demand so strong I'm not totally confident on that call.