IMM futures positioning updated
The latest bank research on IMM futures positioning is now available in the members section, and many thanks to my hedge fund insider 888 for the link.
The members section is now up the very top in the task bar and the login details are the same as on the old site; if you don't have one just let me know and I'll send one via email.
AUD opens slightly higher in quiet interbank trade
Not a lot happening in early interbank trade although the AUD is slightly higher, most likely driven by minor Chinese economic data released over the weekend.
- USD/JPY has drifted back below 103.00 and I'm still looking to sell any rallies towards 104.00 in anticipation of some heavy option protection. EconMin comments that the Yen correction is complete are weighing on this pair for now.
- EUR/AUD has failed to close the week significantly above 1.3200 resistance so I'm considering booking profits; will wait a few hours though.
- USD/CHF still looks very bullish so no need to panic into profit there.
- I'm still running a small cable long from Friday and am happy to sit and see how this develops.
There is nothing much of interest on the economic calendar and with holidays in some parts of Europe later today, I think we may have a very quiet start to the week.
Japanese PM due to speak at 6:30pm in Tokyo
There is some speculation in the London market that he might make some fresh announcements to kickstart economic growth and that has helped USD/JPY pop up to 102.60. I have no idea what he might say or do but if it gets to 103.50/75 then I'll be joining with my giant Panda friend and defend the 104.00 level :)
EUR/AUD: Spending a bit more time above 1.3200
I really think its pairs like this and GBP/NZD which we need to be focusing on (talking my book as usual :) ) and if we close the week above previous highs at 1.3190 then it could really be off to the races.
EUR/USD: 1.2750 looms as pivotal support level
The EUR/USD has eased by around 25 pips in Asian trade, falling in sympathy with the AUD/USD more than anything else. If we get a swift sell-off in Europe then it will certainly be good value to buy near 1.2750 with a tightish stop as there is very important support near there. If it drifts slowly lower then I'd be less inclined to buy on a Friday afternoon.
USD/JPY has been a waste of time today and its really all been about the Anzacs.
USD/JPY: Risk might now be to downside in short-term
Dealers reported plentiful stops below 101.80 earlier this morning and now that AUD/JPY support has broken, we might see some downside pressure on USD/JPY ahead of Abe's address later this evening.
AUD support levels continue to break
This trend is showing no signs of easing up; AUD/JPY trendline support has broken, important daily EUR/AUD resistance at 1.3190 has broken, and solid bids at .9750 have been filled in the AUD/USD. What's even more worrying for the bulls is the lack to any sort of bounce!
If EUR/AUD finishes this week above 1.3200 then I will be adding to my long position and going for a semi-retirement trade :)
AUD/JPY: Nearing base of wedge formation
If you think the AUD is somewhat oversold then you might consider buying AUD/JPY with the base of its consolidative wedhge formation near here at 99.75/80 (see chart).
Friday clean-out as asset managers sell Anzacs
Most of the selling in the AUD and the NZD is being attributed to asset managers out of Asia. There are bids reported at .9750 but momentum is quite strong so if you're sitting on stale longs, it mighn't be a bad idea to off-load some on any small rallies.
EUR/AUD: Daily highs looming at 1.3190
Highs from late January at 1.3190 are fast approaching (see chart) and should attract some profit takers.
NZD/USD and AUD/USD stops triggered
It looks like NZD/USD stops led the way with plenty of local banks getting hit below .8140 and this in turn triggered AUD/USD s/l selling below .9800.
Bids are reported in the AUD/USD at .9750.
Kyle's technical analysis updated
Kyle's excellent technical analysis is again available in the members section, which is now in the task bar up the very top of the site (and the password is the same as before).
If you don't have one, then please let me know and I'll send one via email.
EUR/AUD: Time for a big call; set to rise 20% in coming months
The FX market is all about positioning and in my opinion the market is structurally long of AUD (long Australian assets) at extreme levels and most of the big banks tell us that the underlying demand for EUR is very strong (and really only the speculators are selling).
I'm obviously talking my position here, (and it is a fantastic one :) ), but I feel that a break and weekly close above 1.3250 say, will open the way for a major short-covering rally. If EUR/AUD can reach 1.50 then the AUD/USD would need to fall to my target at 92 cents and the EUR/USD would need to be back near 1.3800. I think this is achievable.
Cable: Fresh longs in play
I'm starting very small with this pair but the strength in the crosses suggests that trading cable from the long side is the way to go. I have only a small position to start with here at 1.5280 and have no stop-loss or profit targets just yet.
I sold out of my AUD/USD purchases at break-even overnight which leaves me with my core long positions in EUR/AUD and USD/CHF. My profit targets there are roughly 1.3500 and 1.0250 respectively.
AUD/JPY: Still trading sideways in a wedge formation
Short-term support at 100.40/45 has been breached but this pair is still trading sideways in a wedge formation. The edges are now roughly at 99.75/100.75.
GBP: Need to look at the crosses to appreciate where the strength is coming from
Just take a quick look at the long-term GBP/NZD chart and then the bottoming formation on there and you get a sense for how under-valued the GBP is on certain crosses and how much scope it has for a recovery. If you're bullish on the USD, I would not be looking at cable as a good pair to trade as long as these cross pairs keep recovering.
AUD/USD, NZD/USD opening near important levels
- Sovereign bids toward .9800 held the AUD/USD up overnight as heavy cross selling re-emerged, but the lack of bounce is very telling! The outlook remains bearish but keep your ammunition dry until we find out more about the size of these bids.
- NZD/USD has broken marginally below important technical support at .8150 but is fighting to close back above there.
NZD/USD testing important support near .8150
There are a string of daily lows near .8150 and a break below targets a major spike low at .8050.
The inverse H&S on GBP/NZD is looking stronger by the day!