Cable and EUR/CHF short-term technicals updated
- Cable; favour selling rallies to trendline and 38.2% at 1.5865:
- EUR/CHF; currently consolidating, buying dips still favoured.
Charts are updated in members and also on Twitter.
Short-term technical outlook for USD/CAD and EUR/JPY
- USD/CAD looks like a buy-dips proposition with .9980 my preferred entry level:
- EUR/JPY remains bullish but overbought, so dip-buying is still sensible in absence of any topping formations.
I've updated these charts in the members section and also via Twitter.
Order levels in EUR/USD, USD/CAD, AUD/USD set to get tested in Asia
- EUR/USD; barriers and Sovereign sell orders reported at 1.3500:
- USD/CAD; solid buy orders 1.0000/20:
- AUD/USD; hedge fund sell orders 1.0470/85.
USD/CAD: Buying interest still solid below 1.0020
Not a pair I trade at all but I'm hearing from 2 different directions that there is decent buying interest 1.0000/20.
Good luck for the rest of today and catch you tomorrow.
Cable: If you like cheap and risky trades
Friend of mine reckons its worth buying cable around 1.5665-ish with a very tight stop below 1.5650. His contacts into the options world are usually very good so perhaps there may be a barrier at 1.5650 (mere guesswork on my part). Anyway, if you're bullish and looking for an entry level with a tight stop, this might be it?
As always, I'd wait and see how the market trades at the level and if it seems to be holding then jump on (even if it means buying a few spreads higher).
Quick overview of Asian trade
- Main interest surrounded a push to trigger trailing stops below 121.50 in EUR/JPY:
- Market tried twice but technical support at 121.60 held firm, leading to short-covering by intraday players:
- New Zealand trade data was slightly better than expected causing a mild NZD rally, but was soon forgotten:
- Australian business confidence also inspired a brief short-covering rally in AUD/USD but hedge fund sell orders above 1.0450 capped:
Yen crosses: No strong sense yet that a top wants to form
Even a committed contrarian like myself has to admit that the Yen crosses are very resilient. EUR/JPY couldn't even retake a minor technical level today, getting with 10 pips of some quite substantial stops but being unable to trigger them. It's not trading like a pair which wants to go lower.
Of course all can change very quickly but for now at least, the old 'trend is my friend' rule applies.
GBP/JPY: Can be one of the noisiest currency pairs
I remember being part of a pilot program back in Frankfurt in the late 80's when a group of us tried to create an interbank market in GBP/JPY. I believe that we all lost money doing this period, which shouldn't be the case in a zero-sum game, but it does go to show how difficult this pair is to trade on an intraday basis.
It's safe to say that not much has happened today in Asia yet GBP/JPY fell by 70 pips and then rallied by 100. EUR/USD has had a 17 pip range during the same period so it just goes to show how much this pair can move when nothing is going on.
AUD/USD: Hedge fund sell orders above the market
AUD/USD has benefited today from reasonably decent business confidence data and also decent New Zealand trade data, which has helped drag the AUD/USD from opening levels near 1.0415 to highs above 1.0450.
Hedge fund sell orders are reported starting at 1.0450 through 1.0485. I will update the orders in the members section when anything changes.
EUR/JPY: Bouncing after failure to break below 121.60
The trailing stops below 121.50 were well positioned and it looks as if interbank dealers are now giving up on their attempt to break below technical support at 121.60 and trigger those stops.
EUR/JPY: Short-term technical support near 121.60
A clean break below this level would open the way for a deeper dip towards prior hourly highs and now a 38.2% retracement level at 120.65 (see s/t technicals in Members section).
EUR/JPY: Trailing stops eyed below 121.50
Dealers tell me that trailing stops are relatively significant in size below 121.50 and have their attention.
EUR/JPY: 123.00 still shaping as important level
There is strong technical resistance at 123.00 (prior weekly high and 38.2% retracement 170/94) and also some talk of barriers at this level. Bulls will be keen to take this level out but after such a long run higher, some will undoubtedly take profits if we have another failure. Risk-reward would seem to favour selling intraday rallies to 122.90 with a tight 50 pip stop. Intraday support levels begin around 121.50/60. Perhaps we get a few sessions of range trading inside of these levels.
GBP/JPY: Shorts reduced; look for better levels to increase
I still really like this pair lower, maybe back to 136 even, but with Yen bearish momentum still quite strong I'm simply not confident that I'm picking the right entry levels. I've reduced my small short position by 1/2 near 142.50, leaving me with a tiny position. I think we may see some choppy range trading for a few sessions so I will try and be patient.
GBP making fresh lows against EUR and USD
I've said it a few times in recent days and I'll say it again, it's never too late to sell sterling! EUR/GBP is up at .8550 and cable is making fresh lows below 1.5720. No point getting in the way of a bearish pound, that's a costly lesson I learned many years ago.
My GBP/JPY short position is looking less irresponsible by the minute but I'm not out of trouble just yet.
EUR/JPY: Looking a bit soft as Europe opens
As I mentioned earlier, the technical resistance at 123.00 (weekly high and 38.2% of big 170/94 downmove) should be respected. There could be a topping pattern forming on the short-term charts so I definitely prefer the risk-reward of being short on the 122 handle.
Europe obviously thinks the same and this pair has fallen 40 pips pretty quickly.