AUD/USD: Fact that it can't break back above .8820 is certainly telling
- Previous lows at .8820/25 continue to cap;
- A daily close below there will add to bearish momentum;
- Professional speculative market continue to sell this pair as proxy for China-credit-bubble play;
- Nothing of note on today's economic calendar.
EUR/JPY topping formation looking more plausible
- Possible topping formation ahead of 143.00 (see chart);
- Needs break and hold below 140.40 to confirm;
- Shorts favoured with stops above 143.25.
USD/JPY: Looks set to test 105.50 yet again
Major technical resistance at 105.50 (61.8% retracement) is still the main topside target in USD/JPY.
EUR/JPY should also be interesting near 143.10/20. If a top can form there on the hourlies then it could be worthwhile to try and pick a top.
AUD/USD: Initial resistance at .8820, look for stronger levels near .8870
The macro speculative market is piling into AUD/USD shorts, with .8500 seen now as a foregone conclusion and some starting to talk now of levels below .80 cents.
Initial resistance is at previous lows of .8820/25 and a break above there will run into further headwinds near the .8870 breakdown level from earlier today.
Sorry, I'm of no help to anyone in this move and I'm getting it wrong more often than I'm getting it right.
Institutional flows still heavily AUD negative
No let up for the AUD/USD and the break below .8820 has brought even more sellers into the market.
Interbank platforms are still showing some heavy AUD supply although profit takers are starting to emerge near .8800.
AUD getting smashed post jobs data
So much for playing AUD from the long side, just ignore what I say.
AUD/NZD is below 1.0600 and GBP/AUD is above 1.8500 and AUD/USD is closing in on trend lows at .8820.
AUD/USD: Favour playing from long side today
- The professional speculative market is quite short of AUD already as a proxy for the 'China credit bubble' trade;
- The daily chart is trying to form a springboard with rising daily lows (see chart);
- If this base holds again, we could easily see a bounce back up above .9050 as shorts get jittery;
- Keep stops below .8860 if tempted by this contrarian trade.
Australian jobs data will be market's morning focus
- Not a whole lot of movement overnight with the GBP first rising on the back of strong institutional demand and then falling back after economic data;
- The AUD/USD has been clinging to levels near .8900 but still looks heavy;
- USD/CAD remains in a solid up-trend but didn't manage to test the 1.10 barrier;
- USD/JPY is currently working through Japanese corporate offers near 104.70 but is showing little sign of wanting to pull back;
- EUR/USD is trading quietly near 1.3600 and is totally at the mercy of the crosses;
- Australian jobs data is the main event on this morning's economic calendar.
GBP: Plenty of demand in early London
Reserve names and real-money funds have been buying GBP against the USD, EUR, JPY and AUD in early London trade (keep an eye on the chatroom for updates).
EUR/USD trade idea: Build shorts inside of 1.3550/1.3750 consolidation range
As you know, I'm not a big fan of trading the EUR/USD although I am quite bearish on the EUR crosses at present (EUR/GBP in particular). I've just been having a good hard look at the longer-term picture and I think a good case can be made for building a short position between 1.3550/1.3750 over coming sessions.
Obviously I need to make some assumptions which some of you will probably reject but that's what makes a market!
- The weekly chart is basically trading sideways albeit with a very mild bearish bias;
- Prices are currently trading well above the major MAs indicating an over-bought state;
- A 3-wave correction from 1.2050 has now been stalled twice roughly near the same level (1.3850);
- If this is the end of the up-move then we should look to sell into rallies as a new medium-term downtrend emerges.
Well you gotta have a side!
EUR/JPY: Worth considering shorts if 143.10/20 holds
I'm looking at some solid technical resistance near 143.10/20 in EUR/JPY and if this level is tested and holds, then I think it may be very worthwhile entering shorts with a stop above 143.50, targeting 139.50.
Levels to watch during European trade
- USD/JPY: Technical resistance at 104.50 and sizeable sell orders at 104.60/65.
- USD/CAD: Barriers at 1.0975 and 1.1000.
- USD/CHF: Stops below .8980.
- EUR/JPY: Strong technical resistance near 143.20.
USD/CAD: Testing barrier options at 1.0975
- High so far has been 1.0974;
- More barriers at 1.1000;
- Likely to be plenty of stops above 1.1010.
AUD/USD: Beware when the bulls turn bearish
There were quite a few so-called analysts spitting out bullish AUD/USD scenarios yesterday when we were trading above .9050. Two of the same have just issued bearish analyses now that we are below .8950; puhleese! Don't they have any shame.
Looks to me like the AUD/USD is consolidating recent losses below .9100 and should find very strong support from a short market below .8900. I'd tend towards playing these edges albeit with a modest bearish bias. Don't get bullish at the or bearish at the bottom.
USD/JPY: Still feels like we could get a silly spike to 110+
I don't have a position in USD/JPY at the moment and therefore my opinion should carry less weight but for what it's worth, it feels to me that we may get a sharp spike sometime very soon. This will probably take out technical resistance at 105.50 but my trade of the year is still to sell a failure near 110.50/111.00 for a move back to 90.
If you can get on to this move up to 110, then good luck to you, but I don't have the patience or energy to 'nurse' a long USD/JPY position at the moment.
Cable: Bull trend in place but expect more sideways in short-term
- 4-hr chart shows the bull trend still in play but the MAs losing momentum (see chart);
- Major support should develop now near 1.6250 whilst 1.6600 will attract profit takers in an already-long market;
- Sentiment remains GBP-positive and I still expect to see increased GBP strength on crosses like EUR/GBP.
FX market does another sharp about turn
I've found the last few days to be very confusing with none of the levels which I presumed to be 'big' making any impact at all. USD/JPY has rebounded just as fast as it fell, the AUD has given up all of its gains and made fresh lows against the NZD, the EUR has stayed static and the GBP has rebounded strongly.
The only consistent trend has been USD/CAD, which keeps edging higher no matter what else happens.
I don't think these sharp intraday reversals are over and done with yet and I'm staying small and flexible until the lights start shining brighter.
Not too much of note on the economic calendar during Asian trade (http://www.fxstreet.com/economic-calendar/).
Good luck today.
Big data events looming later today
- Most of today's action was in regional stockmarkets which were up to 3% lower;
- USD/JPY rallied 50 pips in early trade on reports of a big M&A deal;
- The NZD was well supported by strong business confidence data;
- Plenty of big risk events later today with UK CPI and US retail sales (calendar).