FX market at a standstill
Do not adjust your sets, there is absolutely nothing happening and rates have basically been the same all day expect for a 30 pip rally in the AUD/USD post GDP data (which came in as expected at +3.1% YoY).
Good day to get those chores done!
Once again Asia gives few clear clues to FX market
Maybe I've gone temporarily blind and can't read the signals but these markets are giving me nothing, especially at current levels. If cable or AUD/USD were to dip by 60/70 pips then I think they might be worth a look and if EUR/JPY could rally by 70 pips it too might be worth a look, but otherwise I can't see any inspiring trades.
AUD/USD showing no signs of pulling back
The AUD looks bullish today with no signs of any pullbacks. If trailing stops go off above 1.0300 then I'd suggest a buy-dip mode for the short term.
PBOC more likely to tighten monetary policy
The NPC began yesterday and the announcements that the 2013 inflation target is 3.5% and the M2 target is 13%, would seem to make any possibility of loosened monetary policy very remote indeed. In fact Nomura suggests that we may even see some policy tightening post-NPC.
Tighter monetary policy in China would mean less investment money to be spent and this is generally seen as AUD negative. The iron ore price ignored the positive lead from other commodities and fell by almost 2.5%.
AUD/USD: Sell orders noted staring at 1.0265
A US investment house is reporting some solid selling interest just above the market at 1.0265. I can't guarantee that it will still be there come 11:30am and the GDP release.
Normally if investment houses are reporting AUD activity it will be coming from hedge funds or asset managers.
Personally I'd leave the AUD well alone until the GDP number is in the market.
Expect a very quiet session today in Asia
Australian GDP will be the main risk event and any number significantly higher than expectations will increase speculation that the RBA's rate-cutting cycle might be close to an end. For now I see resistance in AUD/USD near 1.0280 (see charts in members) and in AUD/JPY near 96.00.
I see levels around 122.50 as being pivotal in the short-term for EUR/JPY and we might finally get a test of these levels sometime today, but I'm not overly hopeful as many traders will stay away ahead of the ECB tomorrow.
USD/JPY is in sideways consolidation and its hard to see where the movement will come from today.
EUR price action belies the bears
I've read some very bearish EUR analysis from very respected sources but I just don't think that market price action backs it up. The crosses have made very large gains and despite the usual pull-backs pairs like EUR/JPY, EUR/GBP and EUR/AUD are obeying technically-bullish characteristics. Sure the USD looks very strong but based on what the market is telling us, if you want a long-term USD long position then you'll have better luck elsewhere than EUR/USD.
In fact if you like the EUR crosses overall higher and you think pairs like cable and AUD/USD are looking tired, then long EUR/USD for a return to 1.37 doesn't look like a bad idea at all?
USD/JPY still drifting lower
It appears that Mr Grundlach's USD/JPY target of 200 may take a few sessions to reach (I'll have what he's having :) ). It has drifted slowly lower today and nobody that I can see is reporting any substantial volumes. No strong views here either I'm afraid, sitting here waiting for the lights to come on.
AUD/USD: Appears I was somewhat over-optimistic
No change to rates and every analyst in the market will be poring over each written word in the statement. The spot market has already delivered its opinion; no change no change.
AUD/USD is trading where it was before the announcement after briefly dipping below 1.0200.
Edit: A closer look at the language, particularly the lack of focus on growth impacts of the high AUD, has given the AUD a modest bid tone and fresh intraday highs have been posted above 1.0230. Interest rate futures are now only pricing in a 38% chance of further rate cuts.
Sorry, no strong view on AUD/USD from here.
What to expect post-RBA
I'm presuming that the RBA will leave rates unchanged so it comes down to what is said in the statement. If it retains an easing bias, I'd expect to see a mild drop to 1.0170ish. If we get some hawkish language then we could see the spot rate up around 1.0250. I dont expect any more volatility than that.
CBA: Still see RBA retaining easing bias
Whilst that would not be unexpected, I would see some downside risk for the AUD immediately post meeting if they do retain their full easing bias.
Think you're bullish USD/JPY? How about 200!
Jeffrey Gundlach manages a $56 billion bond fund and he was quoted in a newspaper interview as saying that USD/JPY is going to 200! Not 100, but 200! Now that's what I call a big call.
The hot hand is cooling off
I don't think it's being overly immodest to admit that I had a great start to the year. EUR/CHF, EUR/GBP and EUR/JPY have given me some excellent trading opportunities and I've been able to profit from them. I also don't think it's any coincidence that this period of profitability came after I spent 3 weeks over Christmas studying all aspects of the market, particularly positioning/sentiment amongst the big players and of course the medium term technicals.
Unfortunately I get the sense that my hot hand is starting to cool down. I just don't have a great feel at the moment for what the important levels are so I am scaling back my risk levels immediately. I will continue to run my long EUR/CHF position and my small USD/CHF longs, but apart from that I will be greatly reducing my entry positions until the confidence returns.
(Funny how virtually from one day to the next, we can go from being 100% convinced of our views to being totally uncertain! I guess that's the trader's lot). Maybe best to use me as a reverse indicator for the moment :)
AUD/USD: Selling big rallies favored
Most of today's focus will be on the RBA although the failure to close below 1.0150 might have the bears a bit worried. If we are to see a big move pre-RBA then it's likely to be an up-move, although I fancy we will have a few quiet hours between 1.0150 and 1.0225 at the outside. The RBA will stay on hold but it's the statement which will be most watched for any signs of less dovish language.
Cable sees some heavy short covering
Interbank dealers reported during the European session that there were a lot of hopeful buyers waiting below 1.5000. They never really got a chance to buy and trailing stops were plentiful above 1.5050. Short term risk reward favors buying near 1.5040 with stops below recent lows and a target at the 38.2 retracement level at 1.5315.
EUR/USD: Intraday short-squeeze coming?
Just hearing from a few different directions that there are trailing stops building above 1.3030 and 1.3040. Odds on a sharp short-squeeze anybody?