Quick overview of Asian market
- Only move of note has been in the AUD with short-term market caught short.
- Some selling interest noted in AUD/JPY at 95.10/20 but AUD/USD now likely to be bid on dips back towards 1.0200.
- EUR and GBP stayed very quiet.
- Japan PM announced nomination of ADP Chief Kuroda for BOJ Governorship. No reaction from market this time.
Use flow and order info to support your own views
Please use your common sense when using order and flow information. Only use it if it supports your own views anyway and always wait and see if the levels are confirmed by market price action. Orders get changed and cancelled all the time, just like you would change an order if some market-changing event occurred.
AUD/JPY: Flow guy suggests selling at 95.10/20
Haven't heard from him for a few days but his info has been generally quite good. He says there are solid sell orders between 95.00 and 95.25 (some of which have already been done as the earlier high was 95.05).
Looking at a possible double-top on the charts would suggest to me that short stops should be placed above 95.60.
Oh how nice it would be to have really good info all the time!
USD/JPY: Staying quiet despite BOJ nomination.
Mr Kuroda has as expected been nominated to become BOJ Governor. Remember that on Monday we had the years silliest move merely on rumors that this nomination was going to happen! Today, nothing!
Board member Kiuchi has also been on the newswires saying it's important not to give the markets the impression that they are monetizing debt (if it looks like a duck, walks like a duck and talks like a duck.....).
AUD/USD touches 1.0280 as short-covering continues
Sorry for repeating myself again, but I'd be careful about trying to pick intraday tops as this market simply smells short and we could see some more silly spikes. No word yet on where the trailing stops are bunched but I suspect that sellers will remain patient until 1.0350/60.
AUD/USD: Trading like a market that's short
FX trading is all about positioning; how the market is positioned, how comfortable it is with this position, and of course how it wants to be positioned in the near future.
Obviously fundamentals and technicals come into the equation but when a market becomes overly positioned and uncomfortable, that's when we get decent sized moves (like the Yen last week).
The AUD/USD has twice tried to break back below 1.0200, second time was on the back of a disappointing Capex headline number, but each time its come roaring back to 1.0230.
This market is short and headed higher imho.
GBP: Tide turning in favour of more QE
It's not the Moody's downgrade which is likely to have the biggest impact on the GBP, although fixed income flows into UK Gilts will be affected, but it's next week's MPC meeting which the market is now eyeing with trepidation. There is an increasing feeling in the market that QE4 will be announced and if it is, then we can expect GBP selling to intensify across the board.
I know a few people have been looking to GBP/AUD as a way of playing this and I must say that does make sense. This is not a pair I follow closely but a quick look at the charts suggests that a bullish retracement is underway so be patient and stick a 'silly' offer in somewhere; you never know you might get filled if volatility increases.
AUD/USD: Looks like topside danger today, 1.0300 perhaps
AUD/USD breached the well-protected barrier at 1.0200 overnight but bounced pretty sharply. I suspect that the short-term market is now caught short and the danger is that we see a short-squeeze during Asian FX market trade. If stocks turn bullish around the region, we could see AUD/USD back up towards 1.0300.
EUR/JPY: Still undecided if reversal or retracement
I still prefer the short-term sell-rally play and I'm looking at resistance levels near 122.30/50 for a decent entry point. My target is still the 38.2% retracement level at 117.20.
Asia will open near previous resistance at 121.30 but with EUR momentum on the crosses looking reasonably positive, I fancy we may indeed see some slightly higher levels today in EUR/JPY. Levels near 120.50 should provide support during early trade.
EUR/CHF: Taking some profit off the table
I was lucky enough to buy at the lows on Monday when trend-line support held near 1.2125 and I'm taking half my position off the table 100 pips higher. My main reason for doing this is that the position was a little too large for comfort anyway, and now is much more easy to manage. I also feel that resistance near 1.2250/60 will probably be very firm (it was strong support on way down) so I'm happy to book some profits ahead of there and see what happens.
Nice risk-reward for cable bulls
This optionality ahead of 1.5050 has been well-reported for some time now and the fact that we bounced off 1.5070 on Monday is also telling us something. Cable bulls can considering buying near 1.5070 with a 25 pip stop, targeting a move back to last Friday's pre-Moody's level at 1.5250.
EUR/JPY: Short-term wedge with parameters at 119.20/120.70
The hourly chart is forming a wedge pattern (I've posted it in the members) with parameters at 119.20/120.70. Normally these patterns are continuation by nature which means we should see further falls. In other words, sell rallies to 120.70 with a tight-ish stop.
No bright ideas emerging from today's trade
- AUD/USD: Still sitting above major option barriers and more to come at 1.0150.
- EUR/USD: Staying soft but Sovereign buyers are supporting ahead of 1.3000.
- Cable is also gravitating towards an optionality level at 1.5050.
- Yen crosses choppy as market tries to figure out retracement or reversal?
USD/JPY orders
- Solid offers now starting at 92.25 and again 92.40/50.
- Modest bids 91.55/60.
- Stops below 91.40 but more bids 91.30, and again more stops below 91.20.
EUR/JPY edging higher as Tokyo arrives
Fairly quiet overall this morning. I'll be back in a few hours so hopefully it stays quiet. Next resistance in the cross is yesterdays highs at 121.30.
AUD/USD: Interbank reports very heavy turnover near 1.0200 overnight
The volumes went through the roof as the spot price approached 1.0200, spiking by around 10-fold on interbank platforms. Should be interesting to see who blinks first.