AUD/USD: Looking soft after .9850 break
If you're sitting on stale long positions then it might be best to bite the bullet and take the loss as bearish momentum is very strong. The market is structurally long of AUD and CHF and both of these currencies are very vulnerable to sell-offs. Personally I don't think we will fall in a straight line but I will nevertheless sell any rallies now back towards .9870.
Cable still holding up best of the lot
This support level near 1.5200 in the cable is proving very tough to crack and despite the strong USD leads from the AUD/USD, NZD/USD and USD/CHF, the cable support remains resolute. My guess is that when it does break, it will break hard!
AUD/USD: BIS reportedly on the bid near .9830
That might provide a base for while but I think I will try and exit my purchases from yesterday at .9870 break even and revert to my comfortable USD/CHF and EUR/AUD positions.
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USD/CHF: Picking up an extra gear
Finally is all I have to say after being long for the last 2 months! Next resistance is weekly highs at 0.9575.
Swiss name buying decent amounts in recent trade and struggling to get them in they say.
Cable traders: Set your dip-buying alarm clocks for 1.5310
- 5-wave rally from 1.4830 to 1.5600.
- 38.2% retracement of this is at 1.5310.
- Trend-line support near same level.
NZD/USD takes out important support at .8350
Looks like Europe wants to buy the USD as well. NZD/USD broke below .8350 and triggered stops but the market has retraced and is trying to regain what looks like a pivotal level.
USD/JPY and USD/CHF are trying to hold above 101.00 and .9500 respectively and EUR/USD bears are itching to test 1.3000.
Yen crosses staying steady
No fireworks today in Asia and it looks like we will have a quiet wind-down now until Europe gets going. The Yen crosses still look like the obvious play but I would expect the market to try and have a look below 1.3000 in EUR/USD.
USD/CHF makes marginal new highs above .9500
I'm long of this pair, and have been for a while now, and I'm hoping that we are about to witness a sharp acceleration in bullish momentum. Daily highs at .9500 have just been marginally breached but there is more significant weekly highs near .9575. The 200-week SMA comes in around .9650 and I reckon that if we get a weekly close above there then we will really take off.
Yen selling picking up pace in early Tokyo
USD/JPY is edging towards 101.00 in early Tokyo trade and it doesn't look like the market is tired of buying this pair just yet. We can expect to see further barriers in place but I have no exact info at this moment in time.
I've taken a very small EUR/JPY long this morning as I see a risk of some sharp intraday rallies there.
Asian market open
Apologies in advance for all the clichés but you can click through here and read my opening commentary on FX Street.
EUR/USD levels to watch
- (Watch important resistance at .9500 in USD/CHF as this will impact EUR/USD).
- Short-term technical support at 1.3000/10.
- Sovereign bids still expected below 1.2980.
- Large stops reported below 1.2950.
USD/JPY: Didn't trade between 99.94 and 100.20
One big player put a bid for multiple billions in the interbank EBS trading system at 100.20 overnight, thereby triggering stops and barriers through the big psychological barrier.
AUD/USD: Overall bearish but AUD/JPY could be the fly-in-the-ointment
I'm sticking with my bearish bias on AUD/USD but with solid support at .8350/60 holding in the NZD/USD, and with the Yen crosses likely to turn bullish after USD/JPY broke above 100.00, I'd suggest some caution for AUD/USD bears. Perhaps booking some hard-earned profits might be good way to finish the week?
Trade of the day: Buying EUR/JPY
- Chart resistance at 131.00 has been breached.
- USD/JPY is through the big psychological barrier.
- EUR/USD is nearing strong Sovereign bids below 1.3000.
- Last Friday's price action was extremely bullish.
Lot of rumour driven moves so be very careful
Barriers, stop-losses, and plenty of rumours; just another day in the FX market! There have been no big fundamental changes overnight so many of these moves can be treated as extreme noise.
There are some exceptions, mainly USD/JPY, where the dominant bull-trend has broken a big psychological level so this move must be respected. I'm thinking it might be a day to buy dips in the Yen crosses, GBP/JPY or EUR/JPY perhaps?
AUD/USD: Booking partial profits from yesterday
I remain bearish on the AUD but with EUR/USD approaching Sovereign bids near 1.3000, I'm happy to book some AUD/USD profits from yesterday. I wouldn't be recommending longs any time soon but booking some profits to finish the week is never a bad idea.
I'm still long USD/CHF and that trade is looking much healthier and EUR/AUD continues to build nicely.
Cable: Still needs to break above 1.5600 for further impulse
Have a look at the long term GBP/NZD chart and you get a sense of just how far the GBP has fallen in recent years. I know the situation in the UK isn't great but I'm not sure that we should be getting bearish at these lowly levels. This particular pair looks like it could easily rally by 10% without endangering the down-trend.
The cable has been capped in recent weeks near a 50% retracement level just below 1.5600 and it needs to break back above this in order to generate fresh momentum.