Cable: 'Superstitious rot' but it's nearing an historical pivot level for me
I've been trading cable for fast-approaching 30 years and there are some levels which stick in the mind as having been important pivots over these decades. Even on the way up in recent months, we had a stall and look for a few days, further intensifying my madness :)
This level for me is 1.6410 and I'll be watching with interest to see what happens there if/when we get a renewed push lower.
By the way, as far as I can recall, cable was trading close to 1.45 when I first started trading in 1986. The lows I've seen have been in the low 1.30's and the highs have been above 2.10. What does that mean for the next 50 pips? Nothing! Not even sure what it means for the next 50 big figs!
I guess my bias is bullish as I know the FX market to be 1 great big range trade and there seems more topside potential based on the levels I've seen.
NZD/USD: Bearish outlook after AUD/NZD breaks higher
Again I'm on the sidelines here after failing to read this move correctly. The immediate break in AUD/NZD above important technical resistance between 1.1185/1.1220 is the driving factor and even though I'm overall a dip-buyer in NZD/USD, I think I'll keep my ammunition dry for now. Lower levels towards .8225 certainly look possible. NZD/CAD is another pair which has taken a decisive bearish turn and this pair is also worth watching (rather than trading) as there are often big macro players at work here.
AUD bears beaten back yet again
Like I've mentioned a few times in the last few days, price action at .9270 in the AUD/USD has been extremely instructive. Last week we saw iron ore prices fall heavily during Chinese trade when the AUD/USD was close to that level, yet it couldn't break below. Yesterday we sat for most of the day near there whilst the RBA Governor was speaking, yet even his words couldn't break through. All of this was on-going in a strong USD-bull market!
AUD/NZD is threatening to break above important technical levels, AUD/JPY is back on the bull train and even the GBP is taking a beating against the resurgent A$.
What can't go down, must go up!
USD/CAD: Reducing my short position
I have to be honest and admit that I don't really have a good grasp on why and when the market is currently moving. So I'm reducing my exposure across the board after getting stopped out in cable yesterday.
I'm still running a small core short position in USD/CAD but I'm taking the balance off the table until the lights get brighter.
EUR/GBP: Should offer good two-way trading opportunities
I haven't been trading this pair actively enough to have a strong grasp of what the big levels are, but sentiment has certainly taken a turn over the last few days and both bulls/bears can make reasonably strong arguments; a perfect case for the FX trader.
Most of the fundamentals are still weighed heavily in favour of the GBP but the market is already positioned in this direction. With the Scottish referendum causing a lot of uncertainty we will see these EUR/GBP shorts getting increasingly nervous.
It's definitely worth watching this pair closely for the next few sessions.
JPY weakness accelerates, GBP bulls blink
- The medium-term sideways movement in USD/JPY looks to have been broken in favour of the bulls. I'm certainly not going to start buying it here but I'm not going to sell it either. Perhaps look for pull-backs towards 104.25 to consider entering long positions.
- The Yen crosses also look bullish and AUD/JPY looks likely to test the top of a bullish channel near 99.00.
- AUD/USD has held up reasonably well and last weeks support line near .9270 is still holding.
- GBP was the other big loser with long positions spooked by close-call polls regarding the Scottish independence vote.
- EUR/GBP shorts are at very extreme levels and if this starts unwinding it will take a few weeks to run.
Cable: Longs stopped out below 1.6530
Got my timing wrong on this trade and the residual of my long position has been stopped out below 1.6530. I will lick my wounds and reassess :(
I'm still running a short USD/CAD trade but will most likely reduce now through 1.0950.
AUD unchanged after RBA decision and statement
The AUD "remains above most estimates of its fundamental value" according to the RBA statement but that's having no impact on the AUD/USD which is glued to .9300.
This has been one of the quieter reactions to the RBA decision in recent months.
I still think .9270 is an important level, after it failed to break last week despite bearish news.
Will market start September with a bang
The traditional holiday period in the Northern Hemisphere is now over and we often get some really big moves starting in September. It looks like the USD bulls are holding all the strong cards, led by USD/JPY, and even though it's not my side, I'm at least happy to see the market moving.
Levels to watch:
- USD/JPY optionality at 105.00
- NZD/USD hourly lows at .8340 and trend lows at .8310
- AUD/USD last week's lows at .9270
- Cable hourly lows at 1.6560/70
Cable: Still long, looking to play 1.6570/1.6670 range pre-BOE
The going has been slow for the cable but I'm of the view that a base will form between 1.6570/1.6670 and that we may get further topside after the BOE later in the week. Short-term moves will be determined by where the stops are and there may be some now back below 1.6590. In order to keep our sanity, it's become necessary to trade all of these 50 pip moves, otherwise we sit around for weeks on end doing nothing!
Asia usually trades a 20 pip range, so 1.6600/20 should cover most eventualities.
AUD: Don't expect any surprises from the RBA today
The big week of central bank meetings kicks off today with the RBA. This is probably the most predictable of all meetings with no change in policy warranted and statement language also likely to stay steady.
I'm still in the buy-dip camp on the AUD/USD on most time frames. Last week's price action at .9270 suggested to me that the topside is more vulnerable. Whether the subsequent bounce has alleviated this 'over-sold' sense remains to be seen.
On a more medium-term time-scale I am still hopeful of re-entering longs close to .9150. One needs infinite patience to trade these markets!
Elsewhere, AUD/NZD has done its usual sideways act after a big move. I'd expect 1.1050/1.1200 to continue to corral prices for now.
Cable: Base confirmed; but 1.6670 should provide intraday resistance
Nice bounce in the cable in early Europe and all of the recent price action suggests to me that a base is forming below 1.6600.
I will look to book some intraday profits on any rallies towards 1.6665/70 and then re-load on dips from there.
Cable: Adding to longs, bullish break likely
I've been trading the cable range nicely for the last few days and I feel that we may be about to get a bullish break. The market has been dumping GBP longs against the USD in particular (but also against the CAD) but I feel we may be about to get a mini reversal.
I've increased my long position and will exit the strategy entirely below 1.6530, roughly where my average entry now lies. My target for this trade is initially at 1.6750.
Busy week of central bank meetings ahead
The ECB will be the main event, with expectation of QE high after Draghi's Jackson Hole speech, but the BOJ and BOC will also be keenly awaited. Sentiment remains very bearish on both the EUR and the JPY, but the market is already very short of both currencies. USD sentiment remains strong for now but this is not universal, with both then AUD and CAD making decent gains over the past week.
I'm sticking with my long cable and short USD/CAD positions for now, let's see what the rest of the week brings.
For intraday players, the NZD and JPY crosses are likely to offer the best trading opportunities and we shall endeavour to find a few no-brainers :)
Have a great week.
Cable: Happy to stick with longs for now
I've been trading the short-term 1.6570/1.6610 range to good effect and I am still long in the hope of a base forming nearing current levels and the up-trend re-igniting. It's unlikely that anything will happen during Asian trade and we can expect very quiet ranges until Europe opens.
If we can close the week above 1.6620, then I'll be more confident that a base is forming.
AUD/USD: Still prefer the buy-dip strategy, but extreme patience required
The price action at .9270 earlier in the week struck me as very bullish. There was quite a bit of AUD-negative news hitting the headlines at that time yet the AUD/USD couldn't fall.
I'm in dip-buying mode but as its Friday, I would not be at all surprised to see some AUD/JPY selling emerge during the Asian session, and I will stay patient.
AUD/NZD looks to be consolidating recent gains and I expect a holding range between 1.1050/1.1225 to develop but the bias is turning bullish.
It's Friday! JPY crosses again the focus for Asia
The market has been trying to get bullish on USD/JPY for the last few weeks but the overall range-trading bias seems to be winning the day again. I suspect that the speculative market is still long USD/JPY and some of the JPY crosses, and seeing as its Friday (usually risk-off in Asia) we may see a stop-loss hunt on the downside.
103.50 is the first level of support in USD/JPY and 136.30 is the first level of support in EUR/JPY.
Cable: Still long, trading 1.6570/1.6610 s/t range
I'm of the view that we may be trying to form a base near 1.6600 and return to the bull trend. I've been buying dips over the last two days but I'm still a bit worried, especially by reports from the EUR/GBP market.
The market is undoubtedly still short of the cross and I'm hearing reports of heavy stops above .7970. If they go off, cable will struggle to make any gains.
I've reduced my long position above 1.6600 and am looking to trade a tight 1.6570/1.6610 range for now, whilst still maintaining my bullish core position.