EUR/USD: European corporate sellers 1.3585/1.3600
The other big levels to watch for the rest of today are :
- USD/CAD: Real money buyers between 1.0010 and .9980.
- Cable: Technical resistance at 1.5865.
- USD/CHF: Technical support at .9080/90.
- EUR/JPY: Previous major technical resistance around 123.10.
Have a good (and lucky) day and I'll catch you tomorrow+
EUR/JPY: Testing previous resistance at 123.10
If this level can hold (previous weekly highs and major 38.2% Fibo) then it will greatly increase in importance. A few breaks up and down through here will dilute its technical importance, so definitely worth watching.
Cable: 1.5865 entry level for bears
The 38.2% retracement of the latest down-leg comes in at 1.5865 and there are hourly highs just above there. Bears can try selling a failure at this level with the ubiquitous tight stop-loss order. (Charts in members section).
Market gossip very quiet today
- There have been the usual rumours about tomorrow's China PMI number but nothing worth listening to.
- No big orders or flows as far as I know.
- AUD/JPY was the main mover overall, falling 75 pips from 95.00 to 94.25 before recovering slightly.
USD/JPY drifting lower in fairly listless trade
Maybe I should have kept those USD/JPY shorts after all :( No matter, I really have no strong feel and the position was always intended as a hedge over the FOMC. The USD is minutely weaker against the other majors, but hardly worth talking about.
Staying quiet in early Tokyo
10 pip ranges in most of the majors are not very inspiring so best go do some essential chores and come back when Europe is warming up.
When will the USD start to trend
Obviously we've been having some huge cross moves over the last few weeks and in my experience these events will eventually lead to a big USD move.
The greenback has surged against the JPY but lost ground against the EUR, it's made modest ground against the GBP and the CHF but is basically flat to slightly lower against the AUD and the NZD. Sentiment seems to be turning slightly positive for the USD, despite the fiscal cliff political shenanigans, and at the moment I am of the opinion that these big cross moves will end with a much higher USD. Not against the EUR perhaps, where we will probably see extended range trading somewhere in the 1.30's but perhaps against the GBP (1.50 or below?), the CHF (1.00 or higher), the JPY (close to 100.00) and the AUD (back below 1.0000).
My trade of choice is the USD/CHF, where I'm looking to build a big long position for a possible 15 big figure rally. Well you gotta have a plan :)
USD/CHF and GBP/USD technicals updated
- USD/CHF looks to be in a range between .9080/.9380:
- Cable is in downtrend with strong resistance now at 1.5865.
I've updated the charts in the members section and also via Twitter.
USD/JPY: What can't go down should go up
I sold smalls yesterday in order to have no USD exposure heading into the FOMC and I am closing this position with a tiny profit. USD/JPY has hardly moved and EUR/JPY is consolidating above 123.00, so best I get out and wait for better opportunities.
I'm now running a straight USD/CHF long position and will look to increase near short-term technical support (see members section) at .9080.
AUD/USD: Those hedge fund offers capped the pair nicely
Lots of cross action happening in the AUD as well, with EUR/AUD through the proverbial roof. Hedge funds were consistent sellers all day today in AUD/USD and most of yesterday afternoon as well; looks like their selling is having some effect.
EUR/JPY: Consolidating above major technical resistance
The 38.2% retracement of the massive fall from 170 to 94 comes in just above 123.00 as also does a weekly high from 9 months ago. This level has now been breached and the market is consolidating above it. I think I may have to be very careful in trying to pick a top here, it certainly looks at the moment as if the trend is about to accelerate?
USD/JPY: Trying small shorts near 91.25
I am not a believer in USD/JPY so I'm selling small at 91.25, which in essence gives me a CHF/JPY position. Wish me luck :)
Not much to be learned from uninteresting Asian trading session
Probably safe to say that I'm none the wiser after a pretty uninteresting session so far. Like I said this morning, it was always likely to be a session dominated by large orders in pairs like EUR/USD (barrier protection and Sovereign sellers) and AUD/USD (hedge fund sellers). The Yen crosses rose a bit and then returned to their opening levels, so we're not getting much information from there either.
Other developments today included the announcement of an Australian general election on September 14th and rumours that the FOMC will join in the race to the bottom and try and talk the USD lower. Neither had all that much effect on a listless market.
Risk events tonight include EZ consumer confidence and US GDP data but all eyes will certainly be on the FOMC.
AUD/USD: Some big hedge funds noted sellers in recent sessions
No, I have no idea why but it is nevertheless interesting to note that 2 of the big hedge fund names have been selling AUD/USD over the last 24 hours. This could be part of a cross-play or it could be a straight AUD/USD bet, I'm sure we will find out more in coming days. What I do know is that if the big players all gang up on one pair then we are likely to see some fireworks sooner rather than later. By the way, asset managers are still the main buyers on dips.
I've been trying to short the AUD, primarily against the EUR, at various stages over the last 2 months but I've invariably gotten my timing wrong so I'm not going to start chasing it now. I'll leave it to the big boys.
USD/JPY: Worth a risky short at 91.20
- A failure at 91.20 would open the possibility of a double-top forming:
- Most technical indicators are heavily overbought and market could easily pull back to 89.00 without endangering the up-trend:
- As mentioned below, FOMC could try and talk the USD lower:
- EUR/JPY has major technical resistance at 123.10/20 (weekly highs and 38.2% of 170/94).
Risk-reward will probably tempt the contrarians.
FOMC: Could be risky being long USD
I will be long USD/CHF heading into the FOMC but I may well hedge this position with a short USD/JPY trade until after the event. The reason being that the FOMC might decide to try and talk the USD lower just like the SNB, BOJ etc are doing with their currencies. As we know, the currency market is in a long-term race to the bottom and central banks will take whatever opportunity they can to weaken their currencies.
Big big picture still pointing to higher USD/CHF, 1.10 perhaps
My entry timing has left a lot to be desired in recent weeks but I've been able to pick up a decent part of the this months up move in the EUR. The way I see the world, the next big move will be an aggressive uptrend in USD/CHF.
EUR/CHF has turned and the flight of over-committed asset managers out of CHF assets will continue.
The weakening of the Yen has made the market more susceptible to big moves.
Speculators will be wary of continually selling Yen given the increasing rhetoric about competitive devaluations. As the CHF is undoubtedly historically overbought, there will be much less opposition to selling the CHF.
EUR/USD is in a medium term range trade and will oscillate as the market swings in sentiment between the two biggest currencies.
I've started building a USD/CHF long position near .9215. I have no set stop in mind at the moment so I'm starting out with a very small position.