EUR/USD: Looking bit toppy on medium term charts
Looks like the break below 1.3000 has changed the medium-term outlook for EUR/USD and with an imperfect topping formation on the 4-hour chart (see members), risk-reward would also seem to be in the bears favour.
I'm sure that any short-term rallies back towards 1.3030 will attract plenty of willing sellers.
EUR/USD: All about stops, forget the PMI data
The French and German PMI numbers are only an excuse for dealers to chase stops; firstly intraday shorts were squeezed after French PMI data and now bigger stops below 1.3000 have been targeted after poor German data. More stops were reported earlier below 1.2980.
Looks like the EUR/USD bears may be regaining control.
EUR/JPY: Flip-flopping from buyer to seller
Thankfully I haven't been trading this pair because my instincts and timing have been pretty poor in recent days; selling rallies now looks like a better bet than my previous buy-dips recommendation. Elsewhere on the crosses, EUR/GBP should find some support near .8530 and EUR/CHF at 1.2170.
EUR/USD: Large stops reported below 1.3000
- This is something to watch out for in early European trade with stops reported below 1.3000 and again below 1.2980.
- Dealers report some slightly nervous AUD/USD longs so we may not yet have seen the end of this particular dip.
- EUR/JPY has broken through solid trendline support so selling rallies back towards 129.50 is starting to look like a sensible play.
EUR/AUD: Trying to consolidate break above 1.2750
The AUD has taken a bit of a beating today after the Chinese data and there is more to come I suspect. EUR/AUD is the latest pair to showcase the Aussie weakness and its trying to consolidate a bullish break above 1.2750. I remain long of this pair but won't add to the position until this break is well and truly confirmed.
Not much sign of a bounce in the AUD/USD so much will depend on what happens to the EUR/USD during European trade.
AUD/JPY: Booking some intraday profits
Now that the data is out maybe it's time to book some interim profits. Look now to resell rallies to 102.00.
EUR/AUD: Still consolidating but more gains favoured
Obviously I'm totally biased here in line with my long position and I'm talking my book! I think we are in a short-term consolidation between 1.2600/1.2750 (see chart in members) and that it will break higher soon to test levels above 1.3000.
Taking a line through EUR/JPY and AUD/JPY, this bullish break might happen quite soon.
AUD/JPY: Increased short position in play
I sold this pair on Friday last at a 61.8% Fibo retracement level near 102.85 and we now have a double top forming at this level (see chart in members). It looks like this pair might be ready to accelerate lower so I've increased the size of my short position, targeting a return to test levels near 98.70. My stop-loss is at 103.05.
USD/JPY: More stops now being reported above 100.00
I think we all presumed that they were there but some of the big banks are confirming this now. The main buyers through 100.00 will be option players readjusting their hedges. Those in the know say that we shouldn't expect any decent topside offers until 100.50.
If anything is going to happen today then it will most likely come through USD/JPY I feel.
Gold rallying nicely after panic sell-off but should consolidate
I'd expect previous support levels near $1515 to provide extremely strong resistance in the short to medium-term and I would expect that we will see some prolonged consolidation roughly between $1250/$1500 before the up-trend takes control again.
Cable: Decent technical support at 1.5175
There is trend-line support and a 61.8% retracement (1.5030/1.5410) converging near 1.5175 which should provide decent support.
Now the FX market can really open for the week
Thankfully I've missed no opportunities during a very side-ways Asian session so we can look to early Europe for the first swing trading opportunities:
- EUR/JPY looks like it might be worth buying if an hourly base can form above 129.60/70; keep stops tight as market is already short of yen and the target is 131.10.
- EUR/GBP might be worth selling near .8620 looking for a 60/70 pip pull-back towards mid-range levels. As always, let a top form first.
- If AUD/USD breaks below 1.0250, then look for small relief rallies to get short on.
- Obviously 100.00 is a huge level in USD/JPY; I don't fancy pre-empting what might happen and will wait and see how the market reacts.
Staying quiet in early Asian FX market
Nothing much to report so far this morning with most of the market's focus on USD/JPY, and whether the bulls can muster sufficient momentum to challenge the physical and psychological barrier at 100.00. I have no strong views either way on USD/JPY; I think its best to wait and see how the market reacts if/when we get a bullish break.
I'm still running my longer-term long USD/CHF and long EUR/AUD positions but I've booked most of the profit already from my Friday evening trades in AUD/JPY and EUR/GBP, which were both meant as short-term trades anyway.
I'm out for a few hours and will be back after lunch.
EUR/JPY: Buy dips for test of 131.10
I favour buying intraday dips back towards 129.60/70 with a reasonably tight stop looking for a test of recent highs at 131.10. EUR sentiment seems to be in recovery mode and the market seems intent on seeing if USD/JPY resistance can be broken.
IMM market positioning updated
Members can view the latest update from HSBC in the members section (let me know if you need a password).
The highlights are the increase in JPY shorts and the record levels of NZD longs. Any brave souls fancy a contrarian NZD/JPY position?
USD/JPY: Barrier protection still in place ahead of 100.00
Dealers report plenty of interest near 100.00 with option-related sellers being joined by real-money offers. There has been little pull-back thus far so I prefer to wait and see how the market reacts if/when we get a break above the physical and psychological barriers.
EUR/GBP: Nice bounce off .8500 lows
My patience was rewarded in this pair on Friday when market stops below .8530 were triggered and I managed to pick up some cheapies at .8510. I have no big plans for this trade, and will be more than happy if I can book 100 pips (they are big pips after all). Nothing much will happen during Asia and if it moves 20 pips in either direction in this time-zone, that's usually a signal to trade.