Cable rejects 1.5300 yet again
The USD bulls aren't going away any-time soon it would seem, and cable has rejected approaches to 1.5300 for the second time in a week whilst AUD/USD has also failed at a level for the second time in 24 hours, this time .9825. The burden of proof is on the USD bears as they try to wrest control back but I think it's probably safer to stay with the recent trend and buy USD dips.
AUD/USD: Expect range trading on all timeframes
I don't see a major collapse happening in the AUD anytime soon, especially if the big Sovereign buyers are seen regularly on the bid. I'd expect to see a short-term range between .9700/.9880 and maybe even .9965 on a stretch. Medium term we should stay in a 700 pip range between .9500 and 1.0200 and I just don't think that enough has changed in the AUD or the USD to drive it out of its range trading bias.
RBA: Didn't say very much, AUD/USD back near .9800
Patient buyers were rewarded as AUD/USD dipped back to .9760 after the Amari comments and the RBA minutes. AUD/USD has poped back towards .9800 and I don't believe we will get much more movement today.
USD bouncing after Amari backtrack
The Japanese EconMin has backtracked to some extent on his weekend comments and this has led to some short-covering in USD/JPY and subsequently more broadly into the USD.
I wouldn't read too much into this and AUD/USD should be able to find a base near .9770 and cable should also find support near 1.5210.
GBP/CHF: Could rise 30 big figures without endangering bear trend
For many years GBP/CHF oscillated fairly steadily around 2.50, give or take 20 big figures, and then came the big sell-off as investment managers eschewed all things UK and piled into all things Swiss. I'm not going to argue about the merits of theses strategies, but what I will say is that GBP/CHF could easily rise to 1.80 without endangering the downtrend.
Risk-reward must surely favour longs in the current environment (talking my position as usual).
USD/JPY: Dealers eyeing stops below 101.80
These stop-loss sell orders below 101.80 could come in for some close scrutiny in early Tokyo.
FX market consolidates ahead of Bernanke tomorrow
No great surprise to see some profit taking by USD longs ahead of tomorrow's appearance by Mr Bernanke in front of a US Congress committee. It seems that the word 'tapering' has taken over as the buzz-word of the moment and all ears will be primed for any mention of it by the Fed Chairman.
AUD/USD seems to have found an interim base ahead of .9700 but .9870 should prove difficult to overcome on any rallies, EUR/USD should remain range-bound between 1.2750/1.2950 over the next few sessions and USD/JPY continues to look quite soft and seems to be the pair most likely to see a prolonged USD sell-off.
Pretty safe to say that it will be quiet today. The only event of note on the economic calendar is the release of the minutes from the last RBA meeting, which might be interesting.
Japanese banks downplay EconMins comments
One of the bigger Japanese banks is downplaying the weekend comments from Amari-san regarding the Yen depreciation. They say that although there are some negative aspects, the positive aspects remain overwhelming and the government has little incentive at the moment to talk up the Yen.
Looks like its going to stay very quiet and I'm expecting to see rates at the same levels tomorrow morning. See you then++
Pretty hard to pick the next 50 pips in any major pair
To be honest, I've got absolutely no clue where the next 50 pips are coming from in any of the major pairs, it looks like a 50:50 bet up or down, in almost every case. Some of Europe is closed today so perhaps its best to sit back and wait for some moves in either direction which might offer some reasonable risk-reward for the short-term punter.
In terms of medium term value trades, I still think the GBP crosses look grossly oversold and there should be some good dip-buying opportunities there in coming days.
EUR/USD: Test of 1.2745 still looks likely in short-term
The EUR/USD still looks a bit heavy and although Europe may be quiet today, I do think we might see a test of 1.2745 before too long. Obviously talking my position as usual, but USD/CHF does still feel like it wants to cause bears some additional pain so I think that further dollar gains are likely to come from the Swissy.
I'm still running a small cable position from Friday and will stick with it for a while longer.
AUD targets trailing stops
I'm pretty comfortable with the fact that I closed my EUR/AUD longs as the AUD certainly feels oversold and tight trailing stops start to go off.
Kyle's technical levels updated
Kyle's excellent technical analysis is now updated in the members section (up top of site, same password as before, let me know if you don't have one) and the key points in today's techs are: Lower stop on Cable Shorts; lower stop on AUD/USD shorts and lower stop on EUR/JPY shorts on an hourly close below 130.95.
Likely ranges to start the week
- EUR/USD: Major technical target at 1.2745 on downside and sell orders at 1.2950 on topside:
- USD/JPY: A volatile 100/104 range would not surprise pre-Bernanke on Wednesday:
- AUD/USD: Technical support/resistance now at .9600/.9870 but I do not think we will see either extreme pre-Bernanke.
- Cable: Technical levels at 1.5125/1.5290.
- USD/CHF: I'm staying bullish, .9625/.9900.
USD/JPY: Stops triggered on late reaction to EconMin comments
USD/JPY gapped lower as stops were triggered in what looks like a late reaction to weekend comments from the EconMin that the Yen correction had done enough for now.
EUR/AUD: Time to book some profit
I've been long this pair for quite some time but the failure to consolidate above 1.3200 suggests to me that we may have seen an interim top. I'm booking profits from my long-term position here at 1.3155 and if it rebounds and starts closing back above 1.3250 then I'll consider re-entering.
USD index breaks above major resistance level
The DXY closed last week above important technical resistance at 84.10 and USD bullish momentum does seem to be picking up some steam (see chart).