USD/JPY: Stops building below 79.00
It's been a bit of a stop-loss hunting week and it's likely to finish that way as well. There are plenty of trailing stops now below 79.00 which might well come into focus before the day is over.
On that note I'll take my leave for the week. Have a great weekend and I'll see you early Monday morning++
Updates on recent flows: Cable and USD/INR
- Yesterday's fall in the cable during relatively thin NY trade is being attributed to a one-off flow which is now complete:
- The nasty break higher earlier this morning in USD/INR was initiated by oil companies buying which drove the price above the 200-day MA, which in turn led to heavy short-covering from hedge funds.
EUR/USD pops up 15 pips after EU summit delivers the usual (nothing)
Maybe we get a chance to sell first then? It might be worthwhile selling near 1.3100 looking for those stops below 1.3030 to get triggered later? 10-year Spanish bond yields are flat on the open so we're not going to get a lead from there.
That didn't take long! On to the next batch of stops I suppose.
Easy pickings for the European heavy hitters and the stops below 1.3050 have been done. Next batch are below 1.3030 and I think it might be worthwhile trying to buy a stop-loss driven dip to 1.3020 looking for a swift 40 pip rally or so?
EUR/USD: Stop-loss sell orders below 1.3050
There must be some decent buying interest ahead of there keeping them safe but I expect Europe will have a go at triggering them. There are also stops reported below 1.3030 and you can read more on order boards in the members section.
Anyone else think EUR/JPY can go to 130+
I just popped in to see a hedge fund this afternoon on beautiful Sydney harbour and this is what he is looking at (I hope he doesn't mind me sharing!). He expects the longer-term EUR/JPY downtrend to reverse sharply sometime in the next few months on a break back above 108 approximately, which will take us back to at least 133. Quite a strong view and remember that most hedge funds (it's a fairly small global community) know each other and talk with each other consistently, so they often have the very similar views/positions. It's one thing to have a strong view and another thing entirely to trade it properly, but it's good to know how some of the big speculators are thinking.
FX market staying very slow in Asia
We've had a reasonably busy week so the law of averages kicks in and we get a total non-event today in Asia. Take a break, get the chores done, and revert in a few hours when Europe gets going.
The EU summit enters its second day, and although no major pronouncements are expected, we do live in hope. There is also a raft of European data which might generate a bit of interest. I see no point in having any short-term positions at the moment, best wait for a bit of volatility to emerge.
Goldman Sachs leading indicator turns positive
Not that anybody is paying much attention to anything at the moment, but maybe Europe might pay more attention. This indicator measures readings on 7 leading global indicators and has turned positive for the first time in 11 months; this could be risk-positive.
AUD/USD session outlook
The local banks are saying that there is surprisingly little interest in the AUD at the moment. The big asset managers and reserve managers are all quite long, but don't seem eager to either add or subtract from their present positions. The big macro funds are short and also don't seem overly eager to 'get big or get out!'. That leaves intraday moves at the mercy of newswires and short-term sentiment. I'm sidelined on the Aussie but still prefer the sell-big-rally play.
EUR/USD session outlook
The break back below 1.3080 will have dampened bullish momentum so I'm expecting a session of consolidation. I would expect 1.3100 to be toppy on the session and bids are now getting reported near 1.3030. I'll be pleasantly surprised if we trade outside of this range.
Today is 25th anniversary of Black Monday
The first big stock market crash that I was in the market for happened on October 19th, 1987. If you're superstitious, perhaps putting on a small risk-off trade like AUD/JPY might not be a totally stupid thing to do?
EUR/JPY: Perfect double-top, just to throw some doubt in bulls minds
This market just loves to throw some doubt in, just when the direction seemed clear. EUR/JPY has topped out at 103.83 again, raising the possibility of a double-top. This might encourage some short-term players to book some profits.
EUR/CHF: Maybe I'm mad but I'm going long
When a pair refuses to move then it's best left alone and I've also got a half-rule which I'm about to break ie don't trade in markets that are affected by intervention. Ignoring all that logic but listening to someone who is cleverer than me, I've gone long EUR/CHF at 1.2100 with an obvious stop-loss below the intervention level and an open topside.
EUR/AUD: Bit of buying going through the market
Decent enough flow just reported in EUR/AUD with a Swiss name buying the pair from around 1.2605/10; it's currently around 10 pips higher. The buyer is often referred to as a 'good name' so let's see how good they are this time.
EUR/USD: Order interest 1.3070/80
Light stops reported below 1.3080 but solid bids also seen (1.3065/70). Check the members section throughout the day for more order updates.
AUD/USD still looking well bid
I think Europe will have another serious go at the topside in AUD/USD when they get started in the next hour or so. We are currently sitting 10 pips off intraday highs and the pair is having trouble sustaining any dips, so if some more serious short-covering emerges then we could see the Aussie go on another sharp rally. No word yet on where the big orders are but I should get some info in the next hour.
AUD choppy after China GDP comes in as expected
The first move was down to test hourly support at 1.0360 after the Chinese GDP number came in exactly on expectations. From there, the market has popped up and posted marginal new highs above 1.0390. No real reason to get involved at these levels and parameters at 1.0320 and 1.0440 remain relevant. I'm still in the sell-big-rally camp but I have no strong bias at current levels.