Not a lot to overview in Asian FX market
- EUR/USD has traded a very tight 15 pip range between 1.2955/70:
- EUR/JPY has edged higher with no sign of profit taking pre-NFP:
- Australian trade data came in pretty much as expected:
- Gold back above $1700, Nikkei flat, HK +0.2%.
Afternoon webinar on FX Street
I'll be doing another webinar this afternoon on FX Street, topic this time is 'stop loss hunting'.
AUD: No change after trade data
Trade data came in as expected and the AUD is pretty much unchanged compared with the NY close. Not hearing much from Tokyo interbank market, we might get a test of 82.60 if some fixing demand develops in USD/JPY but looks like a quiet one.
The day ahead in the FX market, Friday December 7th
- Look for positional adjustment ahead of tonight's NFP:
- EUR/JPY should find support near last week's surge level near 106.50:
- EUR/USD reports selling interest 1.3020 and technical support near 1.2950:
- USD/JPY, corporate sellers reported yesterday near 82.60:
- Australian trade data due today and, if strong enough, might trigger renewed test of reported stop-loss level at 1.0525 in AUD/USD.
EUR/JPY: Look to last Friday's 'surge' level for support
Last Friday during Asian trade we had an unexpected move higher in EUR/JPY when a surge of buying from 106.50 moved the market sharply higher. I'm still not entirely sure what drove these flows but in my experience, these levels are usually worth watching closely.
My EUR cross positions take a beating
- EUR/GBP accelerated lower once below .8100 and now targets support at .8050/60:
- EUR/AUD wiped out support levels near 1.2420 and is now eyeing further strong support near 1.2330:
- EUR/JPY is the only one obeying the script, stopping at 108.00 before pulling back to test support at 106.50.
EUR/AUD technical trade idea: Looking to buy near 1.2420
I'm already long of this pair, and if these support levels hold then I will look to aggressively add to the trade. The theory goes something like this:
- Wave 1 was impulsive off 1.2160:
- Wave 2 began off 1.2260, is more constructive in nature, and should consist of 5 sub waves:
- Support should form near prior highs and a 61.8% retracement level near 1.2415/20:
- Stops should be kept below 1.2380 and 1.2335.
As always, if you cannot afford the risk, don't take the trade!
That'll do me for today. See you tomorrow when it should be a bit busier ahead of the NFP++
Cable: Option players still ruling the roost
Cable is being dominated on all timeframes by big Sovereign players and also option plays. I hear the option players are still active, with bids solid around 1.6035/45 and sellers ahead of 1.6150.
Brief overview of Asian market
- Australian jobless rate falls to 5.2%, helping AUD/USD to an intraday high above 1.0480:
- Closer look at data showed full-time jobs being replaced by part-time and the AUD has slid back to opening levels:
- Japanese opinion polls have LDP well ahead in general election race, helping Yen crosses to find fresh buyers:
- Corporate sellers capped USD/JPY between 82.50/60:
- Nikkei rose by almost 1% but most other markets were flat.
USD/JPY: First batch out of the way but more sell orders ahead
Interbank market reports more corporate sell orders at 82.60/65, just above the current market.
Not much happening elsewhere with dealers reporting a distinct lack of interest. Likely to stay that way until Europe opens.
USD/JPY orders: Solid selling interest 82.50
There were plenty of good-sized offers on the interbank trading platforms near 82.50 which have capped intraday movements.
Next technical resistance is at prior highs near 82.75.
EUR/USD technicals: Solid support at 1.3030
There is trendline support plus a 38.2% Fibo coming in near 1.3030 so bulls can trying dipping their toes in the water at that level.
AUD still rangebound after strong jobs data
Recent poor data and the RBA rate cut couldn't knock the AUD lower so the logical thought process was that strong data would send it screaming higher. This hasn't happened either and it looks like we are simply rangebound without momentum.
EUR/AUD is back towards support at 1.2470 and that's the next level to watch.
AUD session outlook: Range trading ahead of jobs data
- Jobs data later this morning will determine sentiment, should be quiet beforehand:
- AUD/JPY has solid resistance between 86.25/45 and support is also solid near 85.50:
- AUD/USD has found a new range between 1.0410/1.0500:
- EUR/AUD has short-term parameters at 1.2470/1.2530:
The day ahead in the FX market, Thursday December 6th
- Australian jobs data expected to show a slight increase in the unemployment rate from 5.4% to 5.5%:
- Look for signs of early profit-taking on Yen crosses ahead of tomorrow's NFP, but overall most of the Yen pairs seem to be in classic consolidation mode so buying dips preferred:
- EUR/USD should take its leads from the crosses during Asian trade, particularly EUR/JPY and EUR/AUD:
- Barrier protection ahead of 108.00 in EUR/JPY:
GBP/JPY: Short-term trade idea
If EUR/JPY is stalling ahead of 108.00 but EUR/GBP is eyeing stops above .8165, then selling GBP/JPY might not be a bad idea? Cheap trade; sell at 132.45 with stop above 132.70 and add to shorts below 132.30?
EUR/JPY stalling ahead of 108.00
There's a daily high back in April at this level and it smells like there could be a barrier there, although that is pure speculation on my part.