EUR/JPY: Headed for 135!
Remember a few Mondays ago when we had the silly move from 123.00 to 125.30 before we promptly fell 600 pips? I remember it fondly and I also think that the daily close back above that days high is an important event.
The uptrend is strong and whilst the big hedge funds are already very long, the huge Japanese domestic investment market has seemingly missed most of this move.
Looks like a shut-your-eyes and stay long trade?
EUR/USD: Starting to favour the topside from risk-reward perspective
Same view here as late yesterday; the EUR crosses are turning bullish with EUR/JPY leading the way but EUR/CHF and EUR/GBP not far behind. If USD/JPY, USD/CHF and cable were to start consolidating, then we could see quite a sharp rise in the EUR/USD presuming the cross trends remain solid.
I favour being long near 1.3025 with a stop below 1.2950, targeting 1.3150 initially and 1.3250 after that.
GBP/AUD: Hedge funds selling again
This market looks like it might close below previous weekly lows at 1.4550, which would be a bearish technical event and may attract selling by some of the bigger macro funds.
Perhaps in anticipation of this, hedge funds have been noted sellers during the NY session thus far.
Cable: Bearish momentum seems to be waning
Despite the big rise in the USD on Friday night, the cable has held up reasonably well on the 1.49 handle which suggests to me that the recent downtrend is running out of short-term momentum. I'm looking for a period of consolidation here, and I'm guessing for now that the edges of the holding range will be somewhere near 1.48/1.52.
EUR crosses look well supported
With EUR/CHF and EUR/JPY still looking reasonably well bid, the short-term path of least resistance from here in the EUR/USD might well be higher?
Risk-reward suggests to me that buying intraday dips to 1.2970 with a stop below 1.2950 is a sensible play.
EUR/USD: It takes less than you might think to move the market
I've just had a meet with one of Europe's more active hedge funds who turn over billions during an average European trading day. It was interesting to hear that amounts around EUR 250 million will easily move the market and that they have to tread carefully and finesse the market in order not to drive prices too far away from their preferred entry level. Some bank claims of near unlimited liquidity are total rubbish.
USD still looks technically sound against Yen and CHF
I've updated the technicals for both USD/CHF and USD/JPY in the members section. The outlook for both pairs continues to look bullish with the Swissy targeting .9610 and blue skies facing the Yen.
AUD/USD still showing no inclination to move
The AUD tried to move lower this morning after worse-than-expected Chinese data over the weekend, but the Teflon-currency has shrugged this off and is now back at its NY closing levels from Friday. Range trading still dominates the AUD/USD, with cross-buyers happy to buy dips and USD buyers eager to sell rallies.
Yen undoing some earlier session losses
There is nothing really going on in the FX market this morning, we saw some modest Yen weakening with USD/JPY up around 96.25 but profit takers look happy to sell at that level and we have eased back to opening levels.
Looks like we are in for a quiet session, with no major economic releases and few big flows to get the market moving.
AUD/JPY: Break above 97.50 opens up more blue sky
This could be an interesting pair to watch today. It broke above daily resistance at 97.50 on Friday and rallied 150 pips before pulling back. I've updated the longer-term technicals in the members and this pair has scope for 104.50 now. Buying intraday dips back towards 97.50 looks like a sensible risk-reward possibility?
Quiet start to early interbank FX market
The retail market won't open for another 2 hours but the interbank market is up and running. EUR/USD is trading at 1.2985, USD/JPY at 95.95, cable at 1.4915 and AUD/USD at 1.0210. Obviously all the close stop-loss orders were done on Friday night and there's nothing for dealers to chase in these thin markets.
There are no obvious trades jumping out at me this morning but hopefully we will find some as the day progresses.
AUD may struggle on Monday morning after poor Chinese data
The AUD held up really well on Friday, with positive risk sentiment after strong US jobs numbers helping the Aussie on the crosses. AUD/JPY made fresh new highs (technicals in members) and GBP/AUD closed right on record lows.
This sentiment may suffer a bit tomorrow morning after Chinese retail sales and industrial production date came in below expectations. This coming on the back of poor Chinese import data last weak might test the teflon surface of the Aussie.
Good luck tonight in great NFP lottery
I prefer to avoid getting involved in the NFP silliness and will stick with my core EUR/CHF and USD/CHF positions. USD/JPY is having a right royal battle at the 95.50 barrier but like all others before, it will eventually break. Cable is stuck in a 50 pip range between 1.4970/1.5020 and still looks very heavy whilst EUR/USD is even less inspiring.
Take care tonight and don't bet the farm, there will be lots of other much clearer trading opportunities in the future. Have a great weekend++
USD/JPY could be at 100 in 3 weeks: Big bank chief dealer
The chief Yen dealer for a major international bank reckons that the domestic Japanese market has been left behind on this latest USD/JPY move from 91.00 and that the move above weekly highs at 95.00 will force their hand. Regardless of NFP, he expects dips to be very limited and he thinks we might see 100 in the next 3 weeks.
Cable support at 1.4970
The USD is making gains against the GBP and the AUD as well as the Yen during Asian trade.
Cable is back below 1.5000 but it should run into some decent support near yesterday's lows at 1.4970.
USD/JPY: Buyers coming from all directions
I'm hearing reports of Singaporean hedge funds, Japanese investment funds, US real money funds and Japanese corporates all buying USD/JPY today. Not sure who's left to do the selling! Buying dips looks like the obvious play but I would still prefer to be buying near previous highs at 94.50 rather than chasing it higher.
AUD/USD edges lower on Chinese import data but AUD/JPY buyers support
China announced an unexpected trade surplus boosted by very strong exports, but the fall in imports has hurt the AUD momentarily, sending AUD/USD back towards 1.0250.
This was immediatelyoffset by AUD/JPY buying as soon as USD/JPY broke it's overnight highs.
Same story for he AUD/USD, sell rallies to play dollar strength and buy dips for AUD/JPY and GBP/AUD plays.