Pay really close attention to the big moves which you don't understand
I think it was Paul Tudor Jones who used to say this. You may not know what's going on but somebody probably does and if they are throwing a lot of money at a certain trade and causing sharp market movements, then you should pay close attention.
By the way we probably won't find out until the weekend who/what is behind today's flows.
Sometimes its all about flows
Today's moves have been all about big flows. Don't go looking for some ridiculous 'fiscal cliff' or 'Japanese election' explanation; its all about some seriously massive flows!
EUR/JPY surge 2
Huge flows going through some of the interbank platforms. EUR/USD sell orders 1.3020/25 are halting the momentum but for how long?
EUR/JPY technicals: Bullish but seriously overbought
This is a common problem we face when a bull trend is taking control but a pair gets overbought and is always liable to nasty reversals. It may well continue higher towards 111 but I think the more likely scenario is that resistance level like 107.35 and 107.95 take a toll and we get some consolidation or reversal. The onus is now on the bears to try and wrest control back so I would not be piling into large short positions anytime soon, rather preferring to probe with small 'testers' and if the technical picture looks like its changed then start trading more aggressively. This pair could fall back towards 103.00 and still be in an uptrend.
Quick overview of Asian market
- Single large flow in EUR/JPY took it from 106.60 to 107.20 very swiftly:
- Stops were triggered in USD/JPY above 82.25 at the same time:
- AUD has stayed heavy on the crosses with market pricing in 77% chance of rate cut next week:
- EUR/USD has yet to test reportedly heavy offers at 1.3020/25:
EUR/JPY still not backing off
There was one very large flow which went through the EUR/JPY market a few hours ago, hitting all platforms at the same time and there might still be some residual shorts out there; at least that's the way it's trading at present with little or no pull-back. There is little in the way of technical resistance close by to deter the bulls or attract sellers so we may yet get another surge before Tokyo shuts up shop for the week.
Two good 'value' trades in the FX market
- NZD/USD: Buy near .8200 with a stop/loss below .8190:
- EUR/USD: Sell near 1.3020 with a s/l above 1.3035:
EUR/USD: Sell orders reported 1.3020/25
I'm told the orders are solid and likely to slow down bullish momentum. Then again, we heard yesterday of the 'big' stops above 1.3010 and that turned out to be nonsense, so I'd suggest we wait and see what happens if/when we get to the level.
Market still not tired of selling JPY
Once again the Asian market surprises and brings us some very welcome volatility. I must admit I did not see this coming and I was obviously not alone, judging by the speed of the rally in EUR/JPY. We may get occasional sharp and violent dips in this pair but there is no doubt that the trend is up and its gaining in strength. It may be simply a matter of jumping on and hanging on!
Next resistance in the cross is a daily high at 107.95.
EUR/JPY buying again the main driver
All platforms are reporting the same story, heavy buying in EUR/JPY emerged suddenly and helped triggered stops in USD/JPY above 82.25.
AUD/JPY has popped up close to resistance at 86.00 and bears might start to get interested here.
EUR crosses on the march higher again as well
- EUR/AUD trading near its 55-day MA at 1.2460:
- EUR/JPY back above 107.00:
- EUR/GBP fast approaching recent highs at .8110:
USD/JPY catches the bears napping
Looks like there were plenty of stops just above 82.20 and USD/JPY surprises yet again with some sharp volatile bursts. Even though some of the crosses are heavily overbought, this pair continues to behave very bullishly. Next resistance of note is at 82.60.
Chances of RBA rate cut increase
Australian private sector credit grew by 0.1% in October against expectations of +0.3%. The futures markets are now pricing in an 85% chance of a rate cut on Tuesday. AUD/USD is still holding firm near 1.0420 but dealers are mentioning stop-loss sell orders building below 1.0410.
EUR/AUD technicals: Resistance looming at 55-day MA
The short-term charts look bullish after the break above 1.2420 but there is resistance looming at the 55-day MA near 1.2460, which has proven to be a reliable indicator in recent times.
EUR/USD session outlook; look to the crosses for guidance
- EUR/JPY is in a bull phase but is heavily overbought and liable to sharp retracements:
- EUR/AUD has turned bullish in last few days after clean break above 1.2420:
- EUR/GBP is moderately bullish but stalling ahead of resistance at .8110, so also liable to pullbacks:
- EUR/USD has possible double-top in place at 1.3005/10 but range-trading mode still dominates:
AUD/JPY: Trade with an intraday bearish bias
The AUD has been under mild pressure for the last 3 sessions as medium-term longs start hedging ahead of the weekend Chinese PMI data and the RBA decision on Tuesday. As its Friday, positional adjustment is always a major theme and JPY shorts are very prominent still, so we could see some covering there. In other words, downside pressure on AUD/JPY could be one of the main factors today. Look to play the short-term range edges at 85.20/86.00 with a bearish bias on the day.
Day ahead in the FX market, Friday November 30th
- EUR/USD failed again near 1.3010 after failing to find stop-loss buyers:
- ACBs still expected to buy dips in EUR/USD:
- USD/JPY still capped by sell orders 82.20/25:
- AUD remains weak on crosses as medium-term longs lighten up ahead of China PMI and RBA:
- Raft of Japanese economic data unlikely to have major impact:
- Positional adjustment ahead of weekend is likely to be major driver so JPY crosses again to be the main movers.