AUD/NZD: Testing short-term technical support near 1.0780
- Previous hourly highs and a 6.8% retracement level sit at 1.0780;
- The bounce in USD/JPY is putting AUD/USD under pressure;
- The NZD is benefiting from the strong business confidence data;
- A clean break below here targets important lows at 1/0730.
Silver still capped below $20.50
The market is still talking about this $20.50 level in Silver so the stops through there must indeed be sizeable. If that level breaks then it will also have an effect on the AUD, CAD etc and lead to at least a temporary spike, so it's definitely worth keeping an eye on Silver over the next few sessions.
New Zealand business confidence hits 14-year highs
The NZD has jumped this morning after very strong business confidence data. AUD/NZD is back below 1.0800 and those trying to pick a top in the NZD are having a tough time of it.
NZD/USD will run into some solid technical resistance near .8415 (see chart) prior daily highs.
Positional adjustment still the name of the game
First things first, if you're looking for intraday trading ideas then either ignore what I say or even better still, do the opposite! My 3 cheap-n-cheerful ideas from yesterday were all losers so obviously I'm not reading the short-term market very well.
The markets' big GBP longs against the AUD and JPY are presently being reduced and although the trends remain in place, we will have to sit tight and see how far the retracement can take us.
Today's economic calendar will be quiet again and we will rely on further positional adjustment for volatility.
Good luck today.
NZD/USD: Settling above previous hourly highs
Selling the NZD/USD was obviously not a good idea and the break above previous hourly highs at .8320 now opens the way for further gains, although there is still a daily high at .8335 to be taken out before the bulls can rest easier.
USD/JPY runs through stops sub-103.70
Looks like the strong CNY fix was the catalyst for AUD/USD to clear .9000 and for USD/JPY to slice through stops below the previous trend highs at 103.70. Now the cat is really in amongst the pigeons and the resilience of USD bulls against the AUD and JPY is set to be truly tested.
Obvious play now to sell any USD/JPY rallies back towards 103.70/75.
Tokyo holiday adding to quiet trading conditions
Nothing going on today in the Asian market so best take advantage of the quiet conditions to get those other troublesome chores taken care of.
There is an old market adage that the real trend for the year will begin on the second trading week in January, but I must say that this is looking highly unlikely at the moment.
Few cheap-n-cheerful trade ideas to start the week!
- USD/JPY: Buy at 103.70 with tight stop below 103.30, targeting 105.40;
- Cable: Buy at 1.6440 with stop at 1.6395, targeting 1.6600;
- NZD/USD: Sell at current levels near .8295 with stop above .8330 targeting .8205.
Quiet start to interbank trading week
- USD/JPY is slightly lower compared with Friday's close, currently trading near 103.90, but it will need to break below 103.70 in order to frighten the bulls (holiday in Japan today);
- AUD/USD is trading quietly close to .9000 and obviously there aren't too many stops close by or otherwise we'd have had a push higher in thin markets;
- EUR/USD is trading at 1.3675 and cable is at 1.6480.
Silver: Break above 20.50 will trigger large short-covering
I haven't been trading Silver at all actively in recent months and I don't have a strong feel for where the big levels might lie. But one of the big Prime Brokers suggests that 20.50 is the big level to watch topside and that a break above there will trigger some heavy short-covering, so keep this in mind if you are actively trading the metals.
Price reactions post-NFP tells us plenty about market positioning (and comfort levels)
- The AUD made some big gains across the board after the NFP telling me that the market is uncomfortably short across the board;
- The EUR made some similar moves, suggesting that the market was also overly short;
- GBP long-levels must be getting uncomfortable for some hence the big cross moves against the EUR and the AUD;
- USD/JPY will struggle to break above 105.50 in coming days but the market remains bullish;
- The CAD continues to look weak and more losses look likely.
Cable: Building short-term base near 1.6450
As you know, I'm a bit one-eyed when it comes to the GBP but it continues to trade very constructively and I see no reason to get off the bull train..
The short-term cable charts are trying to build a base near 1.6450, so use this as the downside pivot with an obvious topside target at 1.6600, recent trend highs.
AUD/NZD: Cheap and cheerful trade for the contrarian bulls
Nobody knows whether this is the bottom or not but at least you know where to put your stop.
Buy near opening levels at 1.0775 with stops below 1.0720 targeting 1.10+
Focus remains firmly on the crosses
- Significant reports that China was selling NZD/USD in overnight trade near .8270
- AUD/NZD support at 1.0730 was tested and held firm;
- EUR is pretty much unchanged after an 'as expected' ECB;
- GBP remains strong and there seems little need to challenge this trend at the moment;
- The JPY remains heavily oversold against many other majors but as yet no sign of a massive buy-back;
- CAD stays weak and depending on what happens at the NFP later today, a move to 1.10 in USD/CAD seems to be on the cards.
Levels to watch in AUD crosses
- Market currently testing trend lows in AUD/NZD near 1.0730;
- EUR/AUD sell orders reported near Fibo resistance at 1.5385.
AUD/JPY might be worth watching today
Some of the bigger players are looking at AUD/JPY this morning with talk of fairly large technical stops on the downside.
Worth keeping on the radar for sure in spite of the fact that it's been so quiet recently (we all know that can't last).
USD/JPY: Expect a volatile 48 hours but 103.70/105.50 set to hold
The uptrend since 97.00 has been quite steep and almost without retracement. The market is very bullish but if/when the retracement comes, it will be just as steep. Important technical resistance at 105.50 continues to cap but a break above there will open up another 500/600 pip window.
So how to trade this pair? With caution I'd suggest! Play as close to the edges of the established technical range at 103.70/105.50 and be patient; we may see both sides on a few occasions.
EUR/USD: Sideways, sideways, and more sideways
The EUR is not a leading currency at the moment, struggling somewhat against the GBP but making strong gains against the CAD and the CHF. EUR/USD typifies this indecision and its been range trading for decades it seems.
There are some large Sovereign bids reported near 1.3525 which will add support on dips but the general market sentiment over recent days has been tending towards bearish, so rallies towards 1.3650 are also likely to find plentiful supply.
Range-trading in other words!