USD/JPY: Should range trade ahead of Fed
- The market will start returning to normal after the lengthy holiday periods;
- Thursday's FOMC will be the next big risk event;
- USD/JPY has major long-term resistance levels at 105.50 and short-term support at 103.90;
- We can expect this range to be tested on multiple occasions over the next few days;
- I'm staying in the sell-big-rally camp.
USD/JPY: Stops triggered in thin markets; technical support at 104.15/20
- Markets remaining very illiquid during holiday period and stop-loss orders make easy pickings;
- Next technical support in USD/JPY is at the short-term bullish trendline near 104.15/20;
- Previous highs below there at 103.80/90 should provide even stronger support levels.
Cable: Looking for buying opportunities near 1.6400
- The GBP was hit across the board after not-so-impressive economic data;
- EUR/GBP looks to be in a bear trend channel with current parameters at .8200/.8425;
- GBP/JPY is in a steep bull trend but pull-backs will also be steep;
- I remain very bullish on cable but as always it's a matter of timing the entry levels correctly;
- I'm looking for an hourly base to form near 1.6400 then I will add to my existing longs with tight stops on new buys below 1.6360.
USD/JPY: Technical resistance at 105.50 looking more formidable
- Profit taking in illiquid markets in the Yen crosses was the main feature in overnight trade;
- GBP/JPY and CHF/JPY were the hardest hit;
- The trends in the crosses remains very strong so dip-buying is still the logical trade;
- That said, the 61.8% retracement of the big 124/75.50 collapse at 105.50 is looking stronger this morning.
Cable: I'm expecting base to form now above 1.6400
Obviously the market is remaining very thin during the New Year holiday period but the inability of cable to dip any more than 30 pips during this period is a telling sign for me.
I remain very bullish and will increase longs on any dips now towards 1.6400. My initial target is 1.72+.
USD/JPY: Still eyeing major technical resistance at 105.50
The 61.8% retracement of the big 124/75.50 collapse comes in at 105.50.
AUD/NZD approaching short-term support levels
The AUD has dipped in early 2014 trade with AUD/USD trading near .8880 and AUD/NZD back testing short-term support levels around 1.0800.
Bulls can try buying this dip with a stop below 1.0750 still targeting a move to 1.1000.
Good luck in 2014 (and a few trading rules to remember)
- Build your account steadily and don't risk too much on one trade;
- Increase risk when you are in profit and reading the market well;
- Reduce risk drastically when you are out of sync with the market;
- (and don't get caught short GBP!!!).
Have a great 2014 and enjoy every minute of it.
2014 predictions: USD/JPY- sell rallies to 112.00
- Since I started trading in 1986, the one constant has been a bearish USD/JPY trend;
- There is strong long-term technical resistance near 111.50/112.50 (see chart);
- The market is very bullish on USD/JPY and already very long;
- This trend may continue but as we know, governments change very often in Japan as does policy. One sniff of such a change and we will see a rout of USD/JPY bulls.
Prediction: Look for a top to form somewhere near 112 in early 2014 and catch a wild stop-loss driven ride back down towards 90.
2014 predictions: EUR/USD- stay in range trading mode
- The EUR is always just one headline away from a big sell-off;
- EUR/USD has been trading sideways over the last 5 years and this trend is likely to continue;
- The EUR is starting to look overbought on the crosses imho and EUR/CHF remains an enigma;
I'd try and stay in trading mode for the EUR/USD, prepared to buy dips and sell rallies across all time-frames. I'd look for rally-selling opportunities in the EUR crosses.
Prediction: Range trading between 1.33/1.46 for most of the year.
2014 predictions: Cable- the only way is up
Cable is headed much higher still. The market is only starting to turn bullish having missed the first move from 1.52/1.53 but I don't think the market is long yet.
- Economic data out of the UK remains very strong;
- Keep a close eye on the EZ banking rules as we could see a big movement of funds into the UK in Q1;
- The GBP is only just returning to more neutral long-term levels on some of the crosses;
- I'm still very bearish on the EUR/GBP cross and this we could see .75 next year.
Prediction: We won't see levels below 1.60 in 2014 and I expect to see cable trading above 1.80 at times next year.
2014 predictions: AUD/USD- pick the 20 big figure range
- Looking back over the years you will probably find that the AUD/USD tends to trade inside of a 20 big-figure range over the calendar year;
- Most of the AUD overbought values on the crosses has been unwound which will take off some of the downside pressure;
- The Australian economy continues to sputter along but the influx of Chinese money into the property sector will underpin the AUD/USD;
Now we have to try and pick the 2014 AUD/USD range. Any prices near .85 cents would be relatively 'cheap' in my view whereas rallies towards 1.05 are difficult to fathom at the moment. I'm tipping an exhaustive sell-off early in the year, perhaps even towards .84 cents, and from there we will rally back towards parity.
Prediction: .84/1.04
Out with the old, in with the new
The FX market has stayed quiet and overall turnover is very low. The last day of 2013 is unlikely to be a busy one.
- Cable is trading steadily above 1.65 and this is one trend which is unlikely to let up any-time soon as the GBP still has plenty of ground to make up on the crosses.
- USD/JPY has moved higher in illiquid markets but I think we are starting to get into over-bought territory. Timing is everything in the FX market and I'm waiting for a selling opportunity sometime in the next 2 weeks, possibly even close to 110?
- The AUD is starting to look cheap against the EUR and the NZD in my opinion but I'd prefer to stay in dip-buying mode rather than getting bulled-up at this time of year.
- As for the EUR? I'm bearish for the first quarter and prefer to play this view through the crosses, EUR/GBP in particular.
USD/JPY: Major technical resistance at 105.50
The 61.8% retracement of the big downmove from 124.00 to 75.50 comes in near 105.50 (see chart).
AUD/NZD trade idea: Buy intraday dips towards 1.0800
- Current levels below 1.10 are 'irrational' imho but as we know the market can stay irrational longer than I can stay solvent;
- Recent lows near 1.0750 provide initial price support and there is short-term technical support at 1.0800;
- Buy any intraday dips towards 1.0800 with stops below 1.0750, targeting 1.1000.
Yen crosses focusing on new topside targets
- EUR/JPY gapped higher on Friday in extremely thin trading conditions and more gains towards 149.00 are certainly looking likely. Any dips now towards 143.00 should be seen as dip-buying opportunities;
- GBP/JPY has also made another significant bullish break and dips back towards 171.00 are now to be seen as 'cheap'. The next big long-term technical target isn't until 184.00.
Cable: Stay in dip-buying mode
Regardless of what is happening in the market, it all seems to be bullish for the cable. The Yen crosses are being driven higher in very illiquid markets whilst any dips in the USD are leading to immediate surges in cable. GBP/AUD goes from strength to strength and seems likely to test levels closer to 2.0000 before too long.
In other words, stay in dip-buying mode for the cable.
Look to buy at levels near 1.6410/20 on the day.
AUD/USD: More downside likely but bearish momentum waning
- Technically this pair still has some scope towards .8650 but further falls are likely to be hard-fought imho;
- The AUD looks like it wants to form a base against the NZD (1.0750 was seriously over-sold);
- EUR/AUD is also back towards long-term equilibrium levels above 1.55;
- AUD/JPY has been very slow in recent months but this consolidation above 90.00 looks bullish to me;
I'm in bottom-picking mode in the medium-term on AUD/USD but patience is required. Short-term I'm expecting a gradual fall inside of an .87/.90 range.