AUD/NZD: Still long and still liking the look of this pair
For me the AUD/NZD has always been a classic range trade in the long-term; buy it under 1.10, sell it above 1.35, and stay out of it around 1.20. I can't see any reason to change this long-term view so I'm happy to stick with my long position from a few weeks ago and look to trade it if the opportunity arises. My target is 1.15 and I will look to add to the position if something happens to alter the market's bearish AUD and/or bullish NZD stance.
If it starts trading below 1.0700 again then I will have to re-assess very quickly.
Looking to GBP/AUD and GBP/JPY for some intraday trading opportunites
- Very little of note on today's economic calendar and most interest will focus on the CNY after yesterday's surprising action;
- The big GBP flows are most likely now complete so we can return to 'normal' activity;
- The market remains long of GBP but also still very bullish;
- The market remains short of AUD and JPY, and perhaps starting to lose patience;
- This suggests to me that we should look to the GBP/AUD and GBP/JPY for intraday trading opportunities and barring any new developments, I'd suggest a short-term bearish bias;
- One other pair worth watching is USD/CHF with large stops reported below .8850.
Good luck today.
AUD remains unaffected by huge moves in CNY
First thing this morning we saw a sharp move higher in USD/CNY, orchestrated by agent banks of the PBOC. Their ploy was obviously to force the big speculators out of the USD/CNY before any band-adjustments can take place and they seem to be having some success. After a relatively quiet afternoon, Europe has opened to some very heavy buying in both the USD/CNY and USD/CNH with US prime brokers to the fore (on behalf of big Macros one would think).
The interesting thing is that the AUD hasn't fallen in reaction to the weakening CNY. If we are in position squaring mood, maybe the Aussie will actually go up!
GBP/AUD: Risky trade idea but R/R looks promising
- Market is overall short of AUD and there will be heavy stops above .9100 in AUD/USD;
- Market is long of GBP and expecting some big buy flows today at the London Fix;
- What if the M&A flows don't eventuate as expected and the AUD shorts keep getting squeezed?
Could be a chance for a 24/48 hour play here in GBP/AUD. Edge into a short position looking for a 200 mpip move lower later today to test 182.00?
Look for short-term resistance levels near 184.70 to cap any intraday rallies.
GBP: How to trade the big flow events such as today's M&A flow
The entire FX market (and their Grannies) seem well aware that there is a big M&A deal going through between Verizon and Vodafone and the second tranche of GBP/USD demand is expected at today's London Fix. Dealers will be trying to position themselves long going into the Fix and if/when the price is jammed higher by a sudden huge demand, they then can book an 'easy' profit. Looking at what happened on Friday, there was nothing easy about it.
The interbank market needs to be very careful in today's environment about how it positions itself prior to these well-chronicled events so as not to be accused of price manipulation. That leaves the professional speculators and the retail market to try and trade it. Obviously the former have better information and better market access and they can trade these events better that the retail trader.
Those who try and buy too early risk getting stopped out by targeted pushes lower so the best policy in my opinion is to wait for any cynical dips (like we saw last night to 1.6580) and buy into weakness. Don't be greedy, take the 80/100 pips on offer once the next batch of hopefuls start buying again- rinse and repeat.
And most importantly, be sure to get out of the market around the Fix time as it could get very nasty indeed.
AUD/USD: .9080/.9100 looming as pivotal medium-term resistance
- Higher equity markets and higher precious metal prices have combined to give the AUD a bid tone and trigger trailing stops across the board;
- Not much of note on today's economic calendar so we will rely again on flows for volatility;
- Most traders are now watching a band of resistance and reported hedge fund offers near .9080/.9100;
- We can expect stops above there as well.
USD/CAD full analysis: Market still very bullish but .....
- You don't have to be a genius technical analyst to glean from the long-term charts that this pair is still quite heavily oversold and has plenty of room to retrace, perhaps even to 1.34;
- This will explain much of the very strong bullish sentiment in the marketplace and some huge buying interest appeared out of the woodwork last week when this pair touched 1.0910/20;
- The daily chart is solidly bullish and I see no technical reason to abandon the buy-dip strategy;
- The one big dissenting voice in my view is the Precious Metals which are making a strong bullish statement and that is usually pro-CAD;
- We also need to pay attention to EUR/CAD resistance at 1.5455, this is an important level.
I tried selling this pair last week after the big move higher in Silver but I got stopped out by the vicious reversal. Any pair that reacts so violently is telling us something and I think that USD/CAD still wants to go higher. Buy any dips onto the 1.09 handle with stops directly below 1.0900.
Keep an eye on the Metals and the CAD-crosses for times when it's better to reduce long USD/CAD positions.
GBP/CAD still market's trade of choice
Morning all. The market's aren't getting any easier to read in my opinion and in cases like this it's probably safest to stick with the prevailing trends.
The latest IMM data tells us what we all know already, the market is keen to buy GBP and sell CAD, AUD and JPY. No point in fighting these trends, wait for retracements and jump on board. EUR and USD sentiment remains neutral.
Can't see any glaring trade opportunities at the moment so settle in and be patient. Have a great week.
AUD/USD lower after Deutsche Bank puts out very bearish call
I'm hearing that they mentioned a move to 60 cents by next year!
USD/CNH is higher in early Asian trade and that's a more likely reason behind the modest 25 pip dip in the AUD/USD. Typical risk-off Friday fare!
USD/CAD: Still looks vulnerable to me
Once again I'll start with the acknowledgement that my track record on the CAD is rather poor and I got stopped out of my short position yesterday morning (but maybe I'm due :) ). The market is undoubtedly short of CAD but on the other hand the reaction from 1.0910 did suggest that the market is still happy to buy USD/CAD. Nevertheless, with metals turning bullish and the AUD starting to show some resilience, I still think the Loonie is ripe for a downside clean-out. There is technical; resistance close-by near 1.1110/20, so keep a stop above there just in case you are tempted by the contrarian trade.
Sharp rebound in AUD/JPY certainly muddies the waters
- I'm still of the opinion that the Gold/Silver markets are telling us something important;
- The market seems keen to sell risk pairs like AUD/JPY but the 'commodity' influence seems to be outweighing or at least counter-balancing this;
- The AUD market smells short and we might get a sharp short-cover ahead of the weekend;
- Not much of note on today's economic calendar so it will be all about positional adjustment.
GBP/JPY: Stop raised to 169.55 (edit)
I really should have listened to my instinct yesterday when everything was screaming at me that the Yen crosses were set to turn lower. Call it post-BOJ blues or whatever you like, the market is overly short of Yen and due for a squeeze.
I'm still well in the money on this trade and as I hate losing on a once-winning trade, I've raised my stop to 169.55. Stop done, back to square one :(
USD/CAD shorts stopped out overnight
Well I did warn that I'm the classic reverse indicator in the CAD :( The nasty spike after poor Canadian data saw my stop triggered but luckily it was a tight trailing stop so no great harm done. Goldman Sachs again got it pretty much spot on.
Any market that spikes 150 pips (even if the data was bad) is definitely telling us something.
GBP/USD: Major flows expected in next week as Vodafone/Verizon deal closes
It's always difficult to gauge exactly how much still needs to be done or even how much will be done in total but I think it's a safe guess that there is a significant amount of GBP/USD to be bought over the next week. When combined with the normal month-end fare, some analysts are expecting a total of around USD7.5 billion equivalent, divided between the 21st and the 25th of February.
I wouldn't necessarily be turning bullish cable on the back of this news but if you're already long (like me) then it might be an idea to sit back and wait another week! With the usual month-end Buba buying of EUR/GBP also in the pipeline, EUR/USD bulls also have reasons to be cheerful.
GBP/JPY update: Feels like I might have missed the top
No matter what anyone says, trading does involve an element of luck. When things are really going your way, those 'flyer' take-profit orders get executed and then it's easy to sit on the bid on dips and re-load.
My 'flyer' order above 172.00 didn't quite get done and now we are over 100 pips lower. I certainly don't want to lose money on a trade that has been well in profit but I also don't want to be selling into weakness (when I should really be buying dips!). The dilemmas of an FX trader.
I'm sticking with the long trade for now with a tight stop below 170.00, let's hope I get lucky :)
USD/CAD: Shorts edging into the money but going is slow
I've been short since Monday morning and USD/CAD is again testing last Friday's lows at 1.0935. Goldman Sachs reckon that support should be very strong at 1.0880 and that bulls remain in control until 1.0840 breaks, so I will be watching those levels with interest. I've lowered my stop now to 1.1030 so it will be a cheap trade even if it suddenly reverses.
AUD/USD: We do love a big call and sub-.80 cents qualifies!
A former colleague of mine who now works in the real world, gets a very deep insight into actual retail demand in most of the major economic centres.
He still follows the FX market very closely and his BIG CALL for the year is that AUD/USD will not see levels north of .91 cents and that we will see levels below .8000 in the next 9 months. He bases this on what he is seeing in China and the lack of alternative industrial innovation in Australia.
I'm neutral, but if we do see that dip I'll be filling my boots!
EUR/GBP and AUD/NZD in 'recovery' mode
These have been two of the more persistent bear trends in the crosses in recent months but both pairs are starting to show signs that a 'bottom' may be in place.
- AUD/NZD has some sizeable topside potential in my biased opinion and once the current 1.0725/1.0925 consolidation is breached, I'm expecting this pair to regain and hold above 1.10 with a medium term target at 1.15+.
- EUR/GBP has stalled at a major 61.8% retracement and this signal should be respected. I booked profits on my medium-term short position and whilst I still prefer to sell rallies, I can also see the merits in buying dips towards .8200 with stops below .8150.