Sean Lee – Page 70 – FXWW.com

AUD/USD: Tending toward a bullish bias intraday

Prime brokers reports suggest to me that the speculative market is largely short as they wait in anticipation of further selling of the AUD from the big real-money funds;
Technical support/resistance levels are very clear at .9050/.9250;
Plenty of risk events looming with the HSBC China manufacturing PMI today, the RBA tomorrow and the the NFP on Friday;
AUD/NZD and AUD/JPY are showing signs of reduced weakness.

Faced with a strong downtrend, care is definitely needed when picking entry levels and I certainly would not buy breaks. I'd prefer to wait for intraday dips and buy in expectation of a move towards .9230/50 over the next few sessions, keeping stops below .9040.

Levels to watch Monday December 2nd

EUR/GBP is edging below previous daily lows near .8290 and the bear trend is picking up some momentum;
EUR/JPY is opening right on important technical resistance at 139.20. We had a marginal break above on Friday but the failure to put in a weekly close above does suggest that the bulls are lacking a bit in momentum;
Cable offers were reportedly heavy on Friday night on the approach to 1.6400;
AUD/USD technical support in form of 76.4% retracement at .9060 has basically held firm so we could see a reduction in AUD shorts ahead of the RBA tomorrow and NFP on Friday.

Good luck this week.

EUR/JPY: Resistance breaks; next level above 140.50

The 61.8% of the big fall from 169 comes in above 140.50 and that's the next obvious technical target.

EUR/JPY: Testing important resistance levels

Monthly highs near current levels, 139.10/20;
61.8% retracement of big move from 169 comes in near 140.50.

Trades to watch for, Friday November 29th

Stay long cable, this is a no-brainer in my view. I've cancelled my take-profit orders this morning and will re-assess;
GBP/NZD: Big technical levels currently and this pair has potential to experience a lot of volatility; I'm bullish but care needed if it suddenly starts to reverse;
I'm small long AUD/USD this morning at .9110 looking to add above .9140. My reasoning is that the big real-money sellers will be taking a long weekend and we could see a short-covering rally inspired by end-of-month demand.
Elsewhere, I prefer to be long EUR/USD and leave USD/JPY alone.

AUD/USD: Technical contrarian trade

The recent fall has stalled thus far at a 76.4% retracement level near .9060;
The short-term charts are trying to form a basing pattern.

I'm not overly convinced by this trade but the risk reward is good; buy at current levels near .9110 with a stop-loss below .9050 looking for a move to re-test .9250.

Today's highlights from the FXWW-Reuters chat-room

Once again apologies to all those awaiting access but we should have it sorted out very soon (as you know, IT stands for Irish Time :) ).

"

Sean Lee FXWW

06:55:51

GBP/AUD continues to accelerate higher and the next target for mine is weekly highs just below 1.8500.
GBPAUD= - Screenshot.png
GBPAUD= - DesktopObject.xml

07:08:51

AUD/USD stalling thus far at 76.4% pullback level https://www.tradingview.com/x/nfQee9AI/

08:09:46

AUD/USD: Hearing from 2 sources that end-of-month demand expected to be positive over next 2 days. Certaily doesn't look like it at moment but if markets thin down for Thanksgiving w/e then might have an effect

08:35:46

Citi FX Wire (Story)

Nov 28

Peter Whitley Thomson Reuters

08:48:36

CitiFX Techs stopped on short GBPUSD position at 1.6330.
– (The position was established at 1.6178 yesterday)

08:48:54

Hard to go against a firm trend at the moment.

Nov 28

FXWW 888 FXWW Pty Ltd

08:58:57

peter I think they lowered the stop to 1.6275 in London session

08:59:58

but yes - same result

Nov 28

Sean Lee FXWW

09:06:24

I'd expect cable to be toppy 16320/30 during Asia with usual profit-takers emerging and of course dips to 16260 will attract technical buyers. Probably won't even be that wide given that Thanksgiving hols tonight in US but we live in hope

Nov 28

Eric Huang Thomson Reuters

09:19:59

Brazil's CB just raises rate to 10%, decision was unanimous... Dollar Real was up more than 3 big figures overnight...
Screenshot.png

Nov 28

FXWW 888 FXWW Pty Ltd

09:26:04

worth keeping an eye on these levels just above in gbpnzd too...
https://www.tradingview.com/x/1scRz7Kd/

09:27:03

and bigger pic view...
https://www.tradingview.com/x/7pnAKHik/

Nov 28

Sean Lee FXWW

09:30:34

We will definitely see more macro positioning adjustments if it starts trading back above 2.00

Nov 28

FXWW 888 FXWW Pty Ltd

09:50:45

yes I'd say the real money guys switching out of uk n into kiwi bonds in the low 1.80s will be starting to reassess

Nov 28

Sean Lee FXWW

09:50:56

RBNZ headlines on Reuters; too early to aqssess impact of LVR restrictions
Screenshot.png

Nov 28

FXWW 888 FXWW Pty Ltd

09:52:04

yes think ANZ getting a bit excited talking abt jan 14 rate hokes

09:55:37

hikes also

11:02:41

altho u can't argue the data coming out of nz is v good looking at that latest biz confidence

11:04:41

New Zealand firms recorded a further lift in their overall level of optimism about the general economy. The general business confidence measure lifted from +53 in October to +61 in November, just shy of a fifteen-year high for the series. On a major divisional basis the retail sector recorded the largest lift in confidence in November, rising from +48 to +70, the highest across the five major divisions and the sector’s highest reading since July 1994. A fresh record was also set at the other end of the sectoral scale. The agriculture sector reported the lowest level of business confidence, but at +51, it has been nearly 20 years since the lowest sectoral level of optimism was this high.

Nov 28

Eric Huang Thomson Reuters

11:35:59

we have got strong building Capex, and Cap Capex in Q3; AUD/USD high so far is at 0.9116; I won't be surprised if there is more upside to run given the short AUD trades are getting crowded...
ECONAU - Screenshot.png
ECONAU - DesktopObject.xml

Nov 28

Anjaney Kumar Punjab National Bank

12:12:19

good mrng everyone and thank u all ...:)

Nov 28

FXWW 888 FXWW Pty Ltd

13:25:11

couple of sharp props selling euryen against 2009 highs for decent retrace

Nov 28

Sean Lee FXWW

13:43:17

AUD/NZD stalled again at 1.1200 on spike; might be worth selling with tight stop above 1.1210

14:37:15

USD/JPY: Earlier in the week the big PBs were reporting heavy sell orders starting above 102.25. Looks like they are still there as 26 was high

Nov 28

FXWW 42 FXWW Pty Ltd

15:16:01

nomura on capex.pdf (193.6 kB) Overall, the report was better than expected and, with mining investment increasing on the quarter; it signals that the peak in mining investment may be delayed.

Nov 28

Anjaney Kumar Punjab National Bank

15:23:00

tx 42... have reason to go wid aud atleast fr short term

Nov 28

FXWW 42 FXWW Pty Ltd

15:27:01

chart keeps telling me 'a very dangerous proposition' ... Id like to see the kumo top (just below 9150) on the hourly broken first, but even if that occurs, next critical mission is to conquer 0.9190/92. Only above 0.92/9210 we start to have a more constructive picture.

Nov 28

Anjaney Kumar Punjab National Bank

15:28:42

tx..

Nov 28

John Webb Market News

17:12:24

OPTIONS: Option expiries for today's NY cut 1000ET. Large(L), Very Large(VL),
* Dollar-yen; Y101.00, Y101.50, Y102.00
* Euro-dollar; $1.3450, $1.3500, $1.3525, $1.3550, $1.3570, $1.3600, $1.3700,
$1.3710

Nov 28

Sean Lee FXWW

17:20:22

Morning John, end-of-month flows expected to be USD negative with EUR, GBP and AUD benefitting according to what I'm hearing

17:20:44

Local guys bought AUD/USD ahead of Fixes in expectation

17:21:36

Cable in s/t 1.6260/1.6330 range but will eventually break higher I would think; my target is at 1.6410

Nov 28

John Webb Market News

17:21:39

yes have reports from Citi and Barx supporting that view

17:21:50

fix views that is

17:23:43

in cable have $1.6376 as a short term target, 1.618% swing proj of the move back from $1.6331 to $1.6258, brings the $1.6381 2013 high into view as well ...would want to see a break of $1.6331 before I got excited about that call though

17:24:48

was told yesterday watch for E/$ downside Friday...no reason given but we have EZ CPI Friday morning which could spark up some interest if it comes in below expectations again

Nov 28

Sean Lee FXWW

17:27:12

Txs Brillo, yep mkt having lot of trouble getting bullish EUR/USD, so must be headed higher!!

Nov 28

Curtis Miller Thomson Reuters

17:31:43

Money flow still showing Aussie buying interest at current levels
AUD=D2 - Screenshot.png
AUD=D2 - DesktopObject.xml

Nov 28

Milan Cutkovic FXWW

17:35:28

BNZ - The Strategist.pdf

Nov 28

FXWW 999 FXWW PTY ltd.

17:39:24

Japan's GPIF will announce its investment results for last quarter as early as tomorrow, as it considers shifting more of its 121 trillion yen to private equity, commodities, real-estate investment trusts and overseas assets.

Nov 28

Sean Lee FXWW

17:55:02

Japan FinMin no comment on FX rates
Screenshot.png

18:00:11

Barclays summary of month end flows: FX Month-end rebalancing analysis

The market value of US equity markets have seen sharp increases since the end of October despite the selloff in US bonds (Figure 1). The relative movements are best explained by the better US economic data and dovish rhetoric from the Fed aimed at delinking any decision to taper asset purchases from potential rate hikes in the future. Outside of the US, equity markets elsewhere were mixed with only Japan registering gains. The rally in euro area bond markets has persisted since the ECB cut interest rates at the start of the month as expectations for further action continues to build. The movement in US markets dominates these, however. The rebalancing of FX hedges at month-end are expected to yield a mild/modest USD sell signal (Figure 2) with the stronger signal being versus the EUR.

Nov 28

John Webb Market News

18:07:36

MS.. Good morning, Another record close in the%... (Story)

18:08:59

CitiFX Wire.. EUR lower after German import pricesEURUSD has shed around 10 pips after German October import prices fell 0.7% MoM (expected -0.3%); these appear to have been taken as a barometer for the CPI data later. EURUSD is now 1.3572.

Nov 28

Milan Cutkovic FXWW

18:16:52

CIBC:

18:16:56

Australian dollar rose on back of better capital expenditure. Stop loss trigger above 0.9130 brought us up to high of 0.9141. There is an interesting story in FT about the report by Bureau of Resources and Energy Economics revealing that investments in Australia’s mining industry has fallen by $3bn to $240bn. Aud stayed around 0.9125-30 into Tokyo break; some sell orders are reported at 0.9150 with weak stops near 0.9175.

UsdJpy backed off towards 102.00 partly due to Nikkei paring gains and partly on the Aussie rally. Market is aware of stops placed under 101.85 coming from interbank accounts; offers lined up ahead of the 102.50-option barrier.

Very dull on the Euro front; there has been some talk of a small Asian central bank selling near 1.3610 but don’t think it is sizeable. Some banks mentioned renewed offers at 1.3590 up to 1.3620.

Cable: Partial take-profit orders set at 1.6410

As you all know I'm very bullish on cable and have been for some time but I'm also a realist and I'm well aware that there is no such thing as a straight-line move in the FX market. With USD/JPY staying stubbornly bullish and with the USD also looking quite strong against the AUD and the CAD, I'm pretty sure that cable will not explode higher vertically.

I will sell out of 2/3 of my long position at 1.6410 in the hope/expectation that we see a dip back towards 1.6100 before the bull train really takes off.

AUD/USD: Fibo retracement at .9060 providing technical support

End-of-month flows expected to be AUD/USD positive;
Fibo support at .9060 (see chart) providing technical support;
Flows in the crosses are overwhelmingly AUD negative with possible exception of AUD/JPY.

More of the same likely in coming days, with the AUD set to lose more ground on the crosses and especially against the GBP. I'd be wary of getting overly short AUD/USD at current levels but a break below .9050 should open up fresh space for further losses.

Cable: Close above 1.6260 will only add to bullish sentiment

GBP/AUD has accelerated higher again and it's next technical target is weekly highs just below 1.8500;
EUR/GBP has edged a bit lower despite usual end-of-month central bank demand;
Cable continues to break technical resistance levels and it seems that the market is finally starting to get the picture, this pair is headed higher.

AUD/USD testing short-term resistance levels around .9200

There is some resistance on the hourly chart around .9200 and I would expect to find some trailing stops above .9205. The big level to watch in my view is Friday's highs near .9250; if we break back above there then the bears will be getting worried.

There was nothing overly AUD-bearish in the speech from the RBA Deputy Governor, hence the mini rally. The NZD/USD is already 25 pips higher and I might have to consider coming out of retirement :)

Trade ideas for Tuesday November 26th

Cable has failed to break above 1.6260 and is threatening to retrace inside its consolidation range (see chart). Short-term cable bears have an obvious strategy to sell rallies above 1.6200 with stops above 1.6275. (Definitely not my side, I'm still long and am happy to buy deep dips).
NZD/USD bounced off a 50% retracement level and the 100-dma near .8130 (see chart). Risk-reward would definitely seem to favour the bulls in the short-term.
(Maybe some opportunities for the brave in shorting GBP/NZD intraday?).

AUD/USD: Stops triggered below .9125 but no follow through thus far

Little in way of technical support until .9060;
AUD/NZD has broken cleanly below 1.1150 but is looking very oversold on medium term charts;
AUD/JPY is only cross showing a spark of life and it's holding reasonably well near 93.00.

There seems little reason to abandon the AUD/USD bear trade but you will need to pick your entry levels carefully.

USD/JPY: Sell orders reasonably light until 102.25/40

Not much in the way of heavy supply until 102.25 and above according to my Prime Brokerage contacts. Now that 101.55 has been overcome, we should expect dips towards the intraday lows at 101.20 to be well supported.

Edit: Also hearing of decent-sized expiries later today at 102.00 and 102.25 which might well act like a magnet.

GBP/JPY also keeps on rattling along and I suspect that much of the Yen selling is coming from this direction

USD/JPY: Market eyeing resistance levels near 101.50/55

Talk of a barrier at 101.50 which will be well defended;
July highs at 101.55 directly above there;
We can expect to see plenty of stops above 101.65/70;
GBP/JPY still looks like the key cross although EUR/JPY isn't too far away from its key resistance level at 139.20.

EUR/USD outlook November 25th: More gains likely

Decent demand reported over the last few sessions and banks expect this to continue;
End-of-month corporate demand and leveraged interest in EUR/AUD and EUR/JPY to the fore;
Modest technical resistance near 1.3580 with stop-loss buy orders expected above;
Potentially looser ECB policy not having any impact on the market;
More short-term gains look likely.

AUD/USD outlook November 25th

Another speech from the RBA deputy-Governor later tonight so we can expect more verbal intervention;
Crosses like GBP/AUD have made significant bullish breaks and more AUD weakness is likely;
Real-money funds and option players are chasing this move lower as they adjust hedges;
There is some technical support (76.4% retracement) near .9060 but momentum is definitely bearish;
Initial resistance is now at .9225/50;
Play these edges with a bearish bias given the strong move in the crosses.

Quiet start to interbank trading week

EUR/USD is trading at 1.3550, USD/JPY at 101.30, cable at 1.6230 and AUD/USD is at .9160.

All of the focus remains on the crosses with the GBP staying very strong and dragging the EUR along with it whilst the AUD, NZD and JPY are the weaklings amongst the majors.

The big level to watch today will be 1.6260 resistance in the cable and USD/JPY has a daily high at 101.60 which will surely attract some selling interest.