Cable: Still prefer to buy dips towards low 1.64's
Cable has never been the most technically accurate currency pair, probably because it's been in one big range trading pattern for the last 30 years! Nevertheless, and especially with the increasing numbers of technically-based retail traders coming into the market, the big levels are still important.
The 61.8% retracement of the 1.6250/1.6825 rally comes in at 1.6470 and that level has held on the first few tries. There will certainly be tight stops below 1.6450 but I still like the buy-dip play.
Buy intraday at 1.6470 and medium-term players can buy any dips towards 1.6375 in my opinion.
EUR/USD: Further gains favoured once consolidation period over
- After doing it's best to trigger stops on the downside, EUR/USD snapped back sharply and triggered topside stops;
- A large buy order on the futures market seemingly triggered the mini-stampede;
- Goldman Sachs issued a sell recommendation on this rally with stops above 1.3900;
- Personally I feel that we will get some extended and possibly whippy consolidation between 1.3650/1.3950 before the next topside move eventuates.
AUD/USD: Bullish momentum continues to build
Yesterday's China flash PMI data gave us yet another insight into the bullish momentum being generated by the AUD at present. Despite some relatively poor data, the AUD/USD dipped 30 pips but quickly regained those losses and is now trading higher. The big level for me is .9150/75 and if we get a clean break above there then we will see some scared bears running!
GBP/AUD looks like it will close below 1.8100 and even AUD/NZD is starting to show some fight, so the bullish case gets stronger and stronger in my very very biased view.
GBP/USD: Fibo support holds first attempt- good R/R for bulls near current levels
GBP/AUD triggered stops below 1.8100 this morning but then jumped and cable tested the 61.8% retracement of the 1.6250/1.6825 rally at 1.6470.
We are not too far away from the latter level still and cable bulls might be interested by the risk-reward on offer at current levels near 1.6485.
Criteria which traders need to attract investment
The prospects are very promising for aspirational traders in the retail space range from hedge fund creation to signal provision, and everything in between. Regardless where you sit on this spectrum, there are certain criteria which you must be able to fulfil:
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There are some really exciting opportunities now in the retail space and in most cases it's simply a matter of ticking all the right boxes.
GBP/USD: Getting close to buy-zone as crosses weigh
The GBP is heavy on the crosses and is likely to remain so against the EUR and the AUD in my view. Nevertheless, 1.6400/25 is a strong buy zone in cable for me and I'll happily buy any dips towards there. Further GBP weakness on the crosses will most likely come from the other components.
GBP/AUD: Stops triggered below 1.8100
There was talk last week of heavy stops in GBP/AUD below 1.8100 and it looks like they've just been targeted and triggered. Cable is 20 pips lower at 1.6470 and AUD/USD is 20 pips higher at .9100, a classic cross play.
AUD/USD: Build longs between .9050/.9150 for move to .9530
For all of the reasons I gave last week I remain very bullish on the AUD/USD. In some ways I'm even hoping for a 'bad' number today out of China because if the market doesn't react bearishly to a bad number, then we must be headed higher!
Based on the price action from last week, I'd expect intraday support to be very solid between .9035/50 and of course there is very meaningful resistance around .9150. I will try and play the edges of this range whilst building my long position.
Quiet start to interbank trading week
- Comments from the ECB's Liikanen that interest rates could still go lower has had no effect on the EUR this morning with the EUR/USD opening the week quietly around 1.3800;
- AUD/USD is trading around .9080 with HSBC flash China manufacturing PMI the main event on today's calendar;
- USD/JPY is still stuck near the middle of its 200 pip holding range, presently trading at 102.15.
I'm still quite bullish and quite long on the AUD/USD, with long EUR/GBP on dips also looking like a reasonable risk-reward play.
Have a great week.
AUD starting to show a bit of strength across the board
The AUD is making steady ground against all of the other majors in rather lack-lustre Asian trade. The big levels to watch are:
- AUD/USD, important resistance at .9150 with heavy stops likely above there;
- GBP/AUD, important support near 1.8120 with heavy option-related selling expected through 1.8100;
- AUD/NZD, previous lows now resistance at 1.0620.
EUR/USD: Deeper dips still possible but I remain in dip-buying mode
With all of the action usually happening in the 2nd half of the European session or during North American trade, it's getting very difficult to trade during Australian hours. The EUR and GBP in particular seem to remain stagnant for hours on end and it's difficult to get a good feel for either currency.
Despite the overnight stop-loss driven break below 1.3770 technical support, the fact that we closed back above there is modestly bullish imho.
I remain in the EUR/USD bull camp so on the off chance that we get a dip during Asian trade, I will happily buy into it.
AUD/USD holding up well despite lower metal prices
Obviously I'm very biased as I'm trying to build a long position but the fact that AUD/USD has edged higher overnight despite a lower EUR/USD and lower metal prices suggests to me that the bears have completely run out of momentum. If the AUD/USD rallies hard on the next piece of good news then we might really be on to something.
I might be wrong and we simply are in an extended .8900/.9150 sideways consolidation so I'm not getting overly aggressive just yet.
Japan is closed today which should ensure a quieter-than-usual session and with little on the economic calendar during Asian trade, we will rely on risk-sentiment and flows for direction.
Good luck today and TGIF.
USD/CHF: Major bank turns bullish post-FOMC
We are seeing some strong buying of USD/CHF as the European session unfolds and it may have something to do with the change in recommendation from Morgan Stanley.
They have issued a note to customers, changing their USD/CHF strategy to bullish post-FOMC. The rebound in the USD is expected to gather strength and the reduction in the SNB inflation forecast makes USD/CHF a good play.
Short-term target is at .8975 with medium-term focus now on .9150.
AUD/USD: Trade of the year- get long!
- The next move in interest rates will be up and this will happen well ahead of others like the US;
- Precious metals look to have put important lows in place;
- With the exception of the NZD amongst the other majors, the AUD looks to be putting a base in place against the GBP, JPY and EUR;
- Technically the AUD/USD is trying to form an inverse H&S;
- Finally all the big players are short and bearish and adding to their short positions and short forecasts, surely a sign that we are headed substantially higher.
I will be building a long position on any dips now towards .8975 and will only exit below .8850.
USD/JPY: More range trading the likely outcome
I'm sure that the market will be getting bullish at the top and bearish at the bottom, but further range tarding is the likely outcome for USD/JPY.
I expect extended range trading inside 100/104 with a modest bias towards buying dips for a test of 110 sometime in the next few months.
EUR/GBP: Really starting to like the long trade
For someone who's been short and bearish for months, I'm surprised at how bullish I've now turned. Thankfully a good friend convinced me to cut my shorts below .8200 and now he's screaming at me to buy dips, perhaps I should listen.
EUR/USD has been trading in a constructive bullish mode for the last few weeks and there seems no reason to doubt that this will continue. Cable on the other hand is starting to obey bearish technical signals.
All of which points to a perfect set-up for a bullish EUR/GBP play. First strong support is at .8325.
Cable: Play 1.6400/1.6650 range
Short-term technical resistance at 1.6650 (trendline and 61.8% retracement) held perfectly yesterday which suggests that there could be more downside ahead.
The strong medium-term up-trend is still in play and I'd expect support near 1.6400 to be very solid.
Looks like a perfect set-up for some extended range trading. The market is currently at 1.6535 so I'd only get interested if it moves 100 pips either way.
EUR/USD: Looking to buy dips to 1.3785
The USD bulls are having a few moments in the sun post-Fed which was slightly more hawkish than expected. I expect these USD gains to be relatively short-lived especially against the EUR.
The initial support levels I'm looking at are at 1.3770/85 and I will buy there if an hourly base can form, looking for a re-test of 1.3950. If this support band cannot hold then be patient and wait for 1.3680/90.