AUD/USD range firm now between .8930/.9130
Both of these levels are now looking very strong and playing the edges of this range makes perfect sense to me.
The NZD/USD looks very strong indeed and buying dips towards .8450/60 in expectation of fresh range highs makes most sense there.
AUD: Jobs data to provide volatility
- The highlight for AUD traders on today's economic calendar will be the Australian jobs data with most analysts expecting a rise in total jobs of somewhere between 12,000-20,000;
- As mentioned earlier, AUD/NZD will be an important pair to watch with historical support levels looming around 1.0500;
- AUD/USD support is expected to be very solid near .8935 and Tuesday's highs near .9040 offer the next resistance level.
Gold looking to close above previous resistance at $1361
The big level to watch in Gold is at $1433 as a break and close above there would create a neckline for a double-bottom.
Buying intraday dips for an upcoming test of this level looks like a sensible play to me. The first dip level worth watching will be the 21-dma at $1331.
NZD closing in on important resistance levels; AUD/NZD at 30-year lows
- AUD/NZD has traded down to 1.05 on 4 occasions in the last 30 years. Each time this level has held. We are currently trading near 1.0550 with the market eyeing recent lows at 1.0488.
- NZD/USD is closing in on daily highs at .8522 with more resistance behind there at .8545.
RBNZ raise rates as expected, NZD choppy
- Statement refers to high NZD, says it remains a headwind but might only moderate gradually in coming years;
- Intends to raise rates to level where it's no longer stimulative.
The NZD dipped slightly immediately after the announcement but has now started to rally again with traders focussing on the RBNZ line that NZD might only moderate slowly in near future.
Gold moving higher in Asia
There is significant resistance at $1361 daily highs and that looks to be today's target for the Gold bulls.
It's unusual to see strong moves in Gold during Asian trade, and today's bull move is even more surprising given the big falls in all commodity markets.
USD/JPY: Everyone's afraid of missing the big upmove
The market is incredibly bullish USD/JPY in my view, and perhaps with good reason. From time to time we get sharp rallies when everyone thinks the big move is about to happen, then it stagnates and the trailing stops get triggered.
Just like EUR/USD, I think it's best to sit patiently and wait for the right level to enter either side of a 400 range.
EUR/USD: Buying dips still preferred play
The EUR/USD has been obeying the main Fibonacci retracement levels in recent weeks and this is normally a sign of an emerging trend.
I'm not sure exactly where to buy, and patience is vital with this pair, but I think it's best to simply wait for an oppuntunity to present itself.
Cable: Worth buying 1.6570/80 with tight stop
The GBP has given back some of its big gains especially on crosses like EUR/GBP but the overall bull trend in cable remains in place.
There is strong technical support at 1.6580 but there will also be tight stops directly below there.
I like the idea of waiting for the weak stops to get triggered and then buy. I've read some reports of decent sized bids near 1.6570 so perhaps buy there with a tightish stop?
AUD/NZD: Longs stopped out as copper price plummets
- The big prime brokers are attributing the large fall in copper prices to momentum-based professional traders;
- Rumours of a Chinese bond default started the ball rolling;
- Risk trades like AUD/JPY were hit particularly hard;
- My pathetic attempt to pick a bottom in AUD/NZD ended in tears yet again, will I never learn :(
Cable: Focus to be on 1.6580 during European trade
- Technical support at 1.6580 with stops expected just below there;
- Busy day on the economic calendar with UK industrial production and the BOE inflation report;
- EUR/GBP has seen heavy demand from macros and model funds since the break above .8300.
I'm looking to buy any deep dips but I think we may see those stops triggered below 1.6580 before a base forms.
AUD/NZD: Fresh longs in play
I'm a glutton for punishment but I cannot resist the attempt to try and pick the bottom in AUD/NZD yet again.
- The iron ore price has been falling heavily yet the AUD is holding up well, usually a bullish sign.
- There are recent lows at 1.0640 which might attract profit takers;
- Tomorrow's RBNZ meeting has a 25bps rise already locked and it may be a case of buying the rumour selling the fact again.
I'm long at 1.0650 with a stop-loss below 1.0590 and an open topside.
AUD drifting lower as iron ore prices fall
Despite the big falls in iron ore prices, the AUD/USD is only falling very slowly which is somewhat surprising.
Support levels in AUD/USD are seen at .8990/00.
The Yen crosses are quiet ahead of the BOJ with plenty of market speculation now regarding the statement and a willingness perhaps by the Japanese central bank to signal a willingness to change policy in the near future.
EUR/GBP: Needs to break and hold above .8350 to form double-bottom
- Some very savvy prop traders have been building long positions in EUR/GBP over the last few weeks;
- Pair formed base at a major 61.8% retracement level near .8155;
- A break and hold above a potential neckline at .8350 would suggest a double-bottom pattern;
- Sentiment in the market is bullish EUR whilst positioning is GBP long- a perfect recipe for a move in the cross.
Buy dips or buy an .8350 break with a tight trailing stop.
AUD/USD: Very heavy turnover reported near .9020
Two of the big prime brokers have been reporting macro-accounts selling AUD against the USD and especially against the EUR. There seems to be somewhat of a battle taking place near .9020, with undisclosed buyers soaking up all the supply.
NAB business conditions and confidence are the only risk events on this morning's calendar.
I still prefer the buy-dip strategy but patience required in AUD/USD.
BOJ main risk event today
There is some speculation that the BOJ statement might contain some surprises and this might explain the weight of USD/JPY buying which we've seen over the last week or so from big professional accounts. All Central Banks seem to be back in the race to call their currencies to the bottom so it would be no surprise to hear a more dovish BOJ.
I'm avoiding the Yen pairs at the moment; after last week's big risk aversion move to be suddenly furiously selling the Yen- not for me thanks!
EUR/GBP: Plenty of activity in early European trade
- Bearish trend-line has been breached near .8308, next target is the 100-dma at .8328;
- Goldman Sachs reporting heavy demand from model funds;
- Citi report solid interest to buy cable near 1.6670.
Risk trades off on lower stocks, lower CNY
Looks like we might have missed our chance to sell the risk trades like AUD/JPY for today with the pair taking a lead from regional risk sentiment and trading lower.
USD/CNY is trading 300 pips above the Friday close and both the Singapore and HK stock markets are 1.5% lower.
Next technical support in AUD/JPY comes in around 92.75.