GBP/JPY trade update
I've got a fixed take profit order at 172.15 on last week's long position and with EUR/GBP possibly looking to form a base, I think it makes sense to reduce GBP exposure.
EUR/USD: Starting to feel very well 'bid'
I admit I've said the same thing before in recent months, and I've also said exactly the opposite, and each time the demon range-trader has come out to make a liar of me. But here we go again. The EUR/USD just doesn't seem to want to dip at all and with the market almost overwhelmingly bearish it seems, I'm thinking we might get a nasty squeeze to 1.4050/1.4100 in the next 10/14 days.
EUR/JPY looks well supported, EUR/GBP technical support has held and there have been reports of heavy bids-on-dips for EUR/AUD. If the crosses are well bid then EUR/USD seldom falls.
EUR/GBP: Taking profit on medium-term shorts
- I've been short this pair for months but the fact that we've consistently stalled at a major technical support level near .8150 (61.8% retracement of .7750/.8810) must be taken seriously;
- I will re-instate if this level is comprehensively broken;
- I remain long and moderately bullish on cable but we may well see extended consolidation 1.65/1.68 which would suggest that any significant gains in the cross are more likely to come from a higher EUR/USD;
- I will stick with my long GBP/JPY longs as well but will re-assess if we start trading below 169.80.
GBP/JPY trade update
I'm still long of this pair and feel very comfortable being long GBP across the board.
I've adjusted my short-term targets and will look to book profits if we get any exhaustive spikes towards 172.00/20.
I'm keeping my stop-loss well below the market but if we start trading regularly below 169.80 then I may re-assess the situation.
USD/CAD: Fresh shorts in play (the ultimate reverse indicator)
My track record in the CAD is abysmal but all signals are pointing lower and I'm trying a top-picking short position near 1.0990. I'll keep it fairly tight for now and will re-assess if we break back above 1.1060.
AUD/USD: Longs preferred as metals break higher
- One of the big prime brokers reported that sell orders from hedge funds above .9080 were cancelled after the bullish break in Silver.
- Chart resistance is very clear near .9080 but there will be plenty of stop-loss buy orders above there.
- I'm tending to stick with a bullish bias here but I have no position at the moment, preferring to watch and wait for confirmation.
Silver makes compelling move higher; looking to add to long position
One market which has made a compelling statement in my opinion is Silver. We had been watching the $20.50 level for months and finally, after a few false alarms, the big break happened. More gains are likely now and I'd look to trade a $21/$25 range in coming weeks with a bullish bias.
Still like overall look of risk trades, but it is Friday
EUR/USD has bounced back towards the upper end of its recent range and the AUD/USD has also recovered from the post-data sell-off which reinforces my belief that the market wants to be long risk trades. My trade-of-choice is to be long GBP and I see no reason yet to change this view.
EUR/GBP is consolidating recent losses and cable made marginal new highs overnight. GBP/JPY is also in consolidation mode and my shortish-term target remains 174.00.
Friday is often risk-off day but as I don't think the market is really long of risk just yet, I'm guessing that today might be a bit different.
Good luck out there and TGIF.
Cable: Looking to play 1.64/1.68 broad range
As you are no doubt sick of hearing, I've been long and bullish GBP for some months now. I still think that EUR/GBP is headed to .75/.77 but what I'm not sure about is whether this moves mainly happens through a higher GBP/USD or a lower EUR/USD? Probably a bit of both.
I'm expecting cable to settle into a 1.64/1.68 range over coming weeks and I will happily book profits on my long position on any 150 pip intraday spikes.
GBP/JPY trade strategy updated
- Longs in play from yesterday at 168.50;
- Will book interim profits if we see sharp intraday spikes to 171.00;
- Strong support should develop now at 168.25/40 and buying dips is the overall strategy for now.
GBP/JPY: Starting to build a long position
I'm already running core long positions in GBP against the EUR and the USD, so perhaps its time to add the JPY as well. My sense is that the market really wants to buy risk trades and whilst I'd love to trade GBP/CHF instead, I've just had too many non-events with the Swissy in recent months. Best stick to the JPY then I think.
I'm not 100% sure on levels just yet so I'm edging into a long position near 168.50 and will start to trade it as volatility hopefully increases.
EUR/USD and Cable seldom rally for 6 consecutive days
Bit of intel from a professional trader in the FXWW chat-room:
"EUR/USD has rallied for 5 consecutive days, adding a total of 1.50 cents (+1.1%). The sequence of daily gains has extended to 6 days once in the 140 sessions since 26th July 2013, the exception coming on Monday 18th November 2013, 60 trading days ago
Best to trim intraday positions ahead of Yellen testimony
The sense I'm getting from the interbank market is that a lot of big macro players have been sitting on the sidelines waiting for the Yellen testimony to be over before placing their trades. I'm also getting the sense that the market wants to buy risk trades, something like GBP/JPY perhaps, but like I said earlier it's definitely best to wait for opportunities after the event.
Anyone running intraday trades would be well advised to reduce or cut prior to the event. You might get lucky but then again, you might not. Best not leave it to luck imho.
Good luck++
GBP/JPY: Starting to like the look of this pair again
I'm certainly not advocating that we should take a long position now ahead of the Yellen testimony .
But, the tide seems to be turning for the risk trades and this is my favourite of those. Wait until after the event and see if technical resiustance near 168.30 breaks. If it does, then I'd suggest a dip-buying strategy for the next big leg higher.
I'm thinking that the large macros are in waiting mode and are ready to pile into the next move.
Only the range-trading day-traders are enjoying these markets
At first glance it looks as though absolutely nothing happened overnight. Those who decided to trade tight ranges and waited for a 30 pip movement in either direction seem to have done best. We will probably get similar conditions until Yellen's speech on Thursday.
Not much to get excited about on today's economic calendar so best we brace ourselves for another slow one.
New FX trade ideas site launching
I am doing a very soft launch of a new trade ideas site, http://www.forextell.com/, and I would appreciate any feedback or comments. There are still some design changes to be implemented like a new logo etc, but I'm sure you'll get the gist.
Feel free to register, add to your favourites, follow us on Twitter, make some comments (nice ones of course) and contact us with any suggestions.
The new FXWW site will launch in coming days (IT time!). I will continue to post my overall market impressions on the FXWW blog whilst providing some general market commentary and of course all well-sourced trade ideas on Forextell.
USD/JPY: Try to pick the 200 pip range
The market is long and bullish which should ensure dips are well supported but rallies will attract profit takers.
Sounds to me like a good recipe for range trading and it becomes a matter of picking the range.
I'd suggest support should emerge near 101.20 and resistance at 103.20.
NZD/CAD topping out, GBP still looks good
The market is still looking for its next directional move and most of the majors will continue to chop sideways early this week until momentum can increase.
- EUR and JPY I very much tend to leave alone;
- GBP is in an uptrend and I see no reason to try and pick a top. I'm still running small long-term long GBP positions against the EUR and USD;
- The CAD seems somewhat oversold and with short positioning at significant levels, I favour buying dips;
- With the NZD still looking overbought, maybe NZD/CAD might be worth a look for those who like exotic crosses;
- I'm also tending to leave the AUD alone although I'm nursing a long AUD/NZD strategy with fairly tight stops;
- Finally the USD is basically trend-less against the majors.
Have a great week.