AUD/USD: Fresh trade initiated
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EUR/AUD: Looking to set shorts for move back to 1.2100
This pair has been leading the way over the last 4 or 5 weeks and the hedge fund community has been busy jumping on board, hoping for a trend reversal. We've seen a 700 pip rally in this time and I think we may be due for a correction. There's a potential short-term topping formation developing and this is happening at a 50% retracement level, adding to the strength of my case. The risk-reward ratio in selling near 1.2310 with a s/l above 1.2340 looks very compelling.
EUR/USD: Support at 1.2560, stops just below
Initial technical support for the EUR/USD is at 1.2560 and there are stop-loss orders placed directly below there. Further support at 1.2480/1.2510 is expected to be tougher to crack.
Resistance begins at 1.2630 with more at 1.2556/60. Sell orders are noted 1.2650/70 but there is also talk of large stop-loss buy orders above 1.2665.
USD/JPY: Huge stop-loss sell orders below 77.90
- Semi-official bids expected at 78.00.
- If they don't materialise, watch out for very large stop-loss sell orders below 77.90.
- Large bids return again at 77.50.
Pro traders "trade-of-the-moment": Sell AUD across the board
Most of the big hedge fund trading teams are back at full strength after the Northern Hemisphere holiday break and everyone is looking for the next trend to jump on. Increasingly negative economic reports out of China mean that the short-AUD play is back in vogue but timing is an important issue given the price of the carry.
EUR/AUD has rallied by over 4% in the last few weeks as big short positions unwound and there is a feeling that we will see further gains. We may see some short-term consolidation between 1.2130/1.2330 before the big players try buying again. The market remains inherently nervous about being long EUR so there will be sharp EUR sell-offs on occasion, making the picking of the correct entry level all the more important.
AUD/USD is in a great big consolidative sideways move so again picking the correct entry level is very important. Look for bears to add aggressively on any rally back toward 1.0400. Personally I'd prefer to wait for higher levels than that but we will have to wait and see how it develops.
AUD/USD technical analysis update
The daily chart is about to run into solid support levels near 1.0220, and with the short-term charts looking very oversold, I prefer the buy-dip strategy intraday. Remember that today is the RBA meeting so I will hold off on any strategies (or only run very small positions) prior to the announcement. For full AUD/USD technical analysis click on this link.
AUD/USD: Trade strategy updated
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EUR/USD outlook
Sovereign bids are reported near 1.2480/85 and they should provide support during Asian trade. The hourly chart looks to be in an 80 pip range between 1.2480/1.2560, so I'd tend towards buying intraday dips as long as 1.2470-ish holds. EUR/AUD and EUR/GBP would both seem to have upside potential towards 1.2150 and .7960 respectively, favouring the buy-dip intraday strategy.
AUD/USD: Trade update; stop-loss levels adjusted
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AUD/USD: Fresh trade idea updated
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Intraday Trades: New cable trade in play
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AUD/USD: More stops tripped above 1.0540
The market is now awaiting the HSBC China flash PMI number and the bears are getting nervous. More stops have just been tripped above 1.0540 and if the number comes in well above 50, then we might see another push higher.
EUR flows and orders
A large Dutch Prime Broker has been working a big sell order in the EUR crosses, mainly targeting EUR/GBP, EUR/CAD and EUR/AUD.
FX market longer piece test
There seems little point in AUD bears trying to pick a top in the AUD/USD as long as a wide variety of Central Banks continue to buy. Once this buying dries up then we will probably see a decent retracement but the spot market could be at 1.06, 1.08 or even 1.10 before that happens. The market is also a bit thinner than usual in early August, when many big professional traders in the US and Europe take their family holidays. With the CB flows dominating, sticking with the short-term trend seems to be the path of least resistance.
There is an ubiquitous bearish bias underlying many trading recommendations relating to the AUD that is a hangover of the market in to '80s and '90s where most senior, experienced surviving traders cut their teeth. Rather than looking for what might happen when the buying dries up, we should be long the AUD looking for corrections to add to longs - a buying opportunity! The AUD is the least ugly contestant in a beauty pageant that will benefit from a world recovery should it ever arrive and will also benefit if more QE is wheeled out. IT IS A WIN WIN!!!
AUD/USD trade idea
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EUR/USD session outlook
We will be providing session outlooks for all the major pairs, plus any other pair which grabs our interest. These outlooks will also usually be available on Essential FX.