AUD/USD: Trade data today and sentiment remains bearish
- AUD/NZD traded to lows at 1.1002 last night as barrier protection held the first attempt;
- AUD/JPY has come off quite heavily but is still in a medium-term holding pattern above 90.00;
- EUR/AUD is making a strong daily close above previous highs at 1.5030;
- AUD/USD is still very heavy and selling rallies looks like the safest play.
I'm not trading AUD/USD at the moment but it still looks soft in the short-term and selling any rallies towards .9100 makes good sense to me. My immediate s/t target is at .8950.
USD/JPY: Headed back towards 100 in short-term
- Trend highs at 103.70 were untested and the market ran out of momentum above 103.00 this time;
- All credible reports suggest that the market is sitting very short of Yen;
- Japanese investors have reportedly started to off-load overseas assets (albeit still in modest amounts) ahead of the capital gains hike in January.
I prefer to play USD/JPY from the short side for now but don't get too carried away as market sentiment is still bearish on Yen. Sell any intraday rallies towards 102.60 and start booking profits in coming sessions if we get close to 101.00.
AUD/USD now over 100 pips lower on the day
We saw highs near .9150 in very early trade this morning and the pair is still looking heavy, 115 pips later. More stops are expected below .9025 and the bears are certainly smelling blood today. EUR/AUD is back above 1.5000 and there are certain to be stops there through 1.5050.
USD/JPY looking very soft as crosses turn south
- Market is already quite long of USD/JPY according to most reports;
- EUR/JPY turned sharply lower yesterday after touching 140 and now it's the turn of AUD/JPY to fall;
- More losses likely in the short-term in USD/JPY from it's current levels near 102.35 imho;
- Market to target stops below 101.90.
AUD/JPY still driving lower, next support near 92.20
- Option barriers at .9050 in AUD/USD have been breached;
- Heavy selling in AUD/JPY is the main factor at play;
- Next technical support lies near 92.20 with the 100-dma at 91.70 (see chart).
AUD/JPY stops triggered below 93.05 after weaker than expected GDP
Q3 GDP came in lower than expected at +0.6% QoQ. This number is just another excuse for traders to chase stops and will be forgotten about in a few hours time.
AUD/JPY stops had been reported below 93.05 and they were the immediate target post data, with lows around 92.90 seen so far.
AUD/USD: GDP today, short-term basing pattern evolving?
- Recent technical support and barrier protection at .9050/60 held yet again yesterday despite some serious attempts to break lower;
- The short-term charts are trying to form a basing pattern but they really need to break and hold above .9170 in order to give this some credibility;
- GDP is on today's economic calendar with +0.8% QoQ expected. There may be some short-term impact from the data but with the RBA not meeting again until February, this number will be quickly forgotten.
EUR/USD: Important level to watch today at 1.3625/35
- A 61.8% retracement level at 1.3625 has been holding firm in recent days;
- Fibos are unreliable in non-trending markets but when they start to hold, it can signify the beginning of a trend;
- Sell orders reported between 1.3625/35 but stops are likely to be heavy above 1.3650;
- Personally I think the EUR is looking a little heavy on the crosses.
USD/JPY: Reverses sharply as short-term market caught long
- AUD/JPY and NZD/JPY were both at top of recent ranges;
- EUR/JPY was exhausted after triggering a barrier at 140.00;
- Many PBs were reporting that the market had gotten ahead of itself with long USD/JPY positioning;
- Those in the chat-room last night would have read some comments (indirect) from the Morgan Stanley chief dealer which picked the market perfectly (MS.. Chief Dealer: Observation - USDJPY has taken a rather rapid 40 point sell off following the 140.00 print in EURJPY - we have fielded numerous questions, all the same - What's going on? The short term market is long and feels overextended. Don't rule out 102.20 on the day which I think would be a good buying area.)
We will have these short-term clean-outs but the market feels bullish to me and it's really keen to buy this pair, so buying big dips for an eventual break above 104 seems like the play to me.
Cable: Selling a bit more at 1.6410
There has been more positive data out of the UK and this has seen cable move back above 1.6400. There has also been a lot of action in the EUR/GBP options market, all one-way traffic namely GBP buyers.
Nevertheless I have taken the opportunity to sell a bit more cable at 1.6410 and I've now unloaded 65% of my position. All the analysts and strategists who were bearish cable at 1.52 are now turning bullish, never a good sign in my view. It's fast approaching Christmas and you never go broke booking profits, but I'll keep the balance just in case :)
AUD/USD fairly steady after un-surprising RBA
Bids at .9060 are still holding firm and AUD/USD has settled near .9085 after the RBA delivered no surprises. It looks like we might be in for a fairly serious fight around .9050/60; if it holds then we could see a solid rally but if it breaks, then we will be below .9000 pretty quickly. One thging in the Aussie's favour is that some of the crosses like EUR/AUD are starting to look slightly heavy.
AUD looking soft heading into the RBA
The reaction of the AUD/USD after the retail sales where it rejected .9130 was quite bearish in my opinion and the AUD looks very soft heading into the RBA decision. There will be plenty of stops below .9050 for sure so be careful if you're sitting on stale longs.
AUD/JPY: Trade idea for the bearish contrarian
All those contrarians out there, like myself, should keep a close eye on this pair. If the 200-dma can hold again then we should see a fairly sharp sell-off ensue (see chart).
My suggestion is to sell any intraday rallies to 94.30 with stops above 94.80. If an hourly top starts to form below the 200-dma, then I would look to increase the position keeping stops fairly tight with a target at 90.00.
Big day for AUD with retail sales and RBA
- Retail sales for November expected at +0.4% MoM;
- RBA widely expected to leave policy unchanged at last meeting for 2 months;
- AUD/USD support at .9050/60 with stops expected below this level;
- AUD/NZD back in bear mode and expected to test large optionality at 1.1000 in coming days;
- AUD/JPY still in sideways mode and needs to break above the 200-dma at 94.40 in order to generate fresh bullish momentum.
Mixed bag as you can see. AUD bulls will probably find best value against the EUR and the JPY. AUD bears will probably find best value selling rallies against the USD and the NZD.
Might be a good time to book some profits on EUR/AUD, GBP/NZD etc
- Despite a big technical break yesterday, GBP/NZD failed to consolidate these gains and will close back near 2.0000;
- As mentioned below, EUR/USD is threatening to form a significant top near 1.3625 (see chart);
- AUD/USD has been trying to form an interim base near technical support at .9050/60.
Some of these crosses have had really good runs and if you've been clever enough to run long positions over the last few weeks, now might just be a good time to book at least some partial profits.
Look for USD strength to continue in coming sessions
- USD/JPY is set on challenging recent trend highs at 103.70;
- Cable looks overbought to me in shortish-term and could be ripe for a retracement;
- EUR/USD has put in an interim top at 1.3625, a 61.8% retracement level, and this could signal that a down-trend is beginning?
Lots of unknowns as usual but after a long phase of cross trading, we may be about to see the focus return to the Greenback. The safest play (if there is such a thing) is to play EUR/USD from the short-side keeping strategy stops clearly above 1.3650.
Cable: Target filled at 1.6410
The first of my longer term targets at 1.6410 has been filled. Remember that we've come from 1.50 on this rally and momentum will start to wane at some stage. I'm sticking by my 1.75 target for early next year but booking some interim profits and re-loading on dips is never a bad idea.
EUR/GBP: Stops triggered below .8290 in early interbank trading
I remember being on the receiving end of some dodgy GBP/DMK stops during early Monday morning trade over 25 years ago, and some things will never change. Some 'brave heroes' took advantage of non-existent liquidity to trigger stops in the EUR/GBP below .8290. I shouldn't complain as it's going my way, but the market really needs to come up with some better way of starting the week, rather than an 8am New Zealand start when no-one's watching (rant-of-the-week out of the way early :) ).
There were reports on Friday of good-sized selling interest in the cable towards 1.6400 and I'm watching price action closely as I'm looking for a time/place to start booking some partial profits on my long position.