AUD/USD: Loss booked on long trade
My attempt at picking a short-term base in the AUD/USD was ill-conceived and I took a 73 pip loss on the position on Friday night. The move lower in the AUD on the crosses has been very strong and when this is happening, it's pointless trying to fight it. I took the loss and will live to fight another day.
I will revert to concentrating on my long GBP trades against the EUR and the USD.
AUD/NZD: Stops triggered below 1.1190
The low so far has been at 1.1175 and the market really doesn't like the AUD very much at all. I'm still running an AUD/USD long position but with all these moves in the crosses, I'm keen to get out on any rallies and concentrate elsewhere.
AUD/USD and Cable update
- Prime broker reports stops just above 1.6200 in cable but sell orders also seen 1.6215/20 which should be enough to cap during Asian trade (unless large GBP/JPY demand appears out of Tokyo);
- AUD/USD looks like it's struggling to close the day below .9225. I know its only marginal but it still gives some hints as to markets' strength. Sticking to my .9200/80 Asian range with bullish bias.
- GBP/JPY still roaring ahead and the strong close above 163.00 is very significant indeed. Buy any dips for now.
Cable: Expect test of 1.6250/60 later today
Obviously talking my book here as usual but all the signs remain bullish for the GBP in my biased view. GBP/JPY and GBP/AUD have made strong technical breaks and once the crosses start heading in one direction, the cable is virtually certain to follow. There is major technical resistance at 1.6250/60 and the market tends to gravitate towards these big levels. A clean break above there will lead to another 200 pip gap higher towards 1.6410/40 and that's where I would consider booking some short-term profits.
AUD/USD technicals: Let's see if market can close below technical support levels
The daily chart is showing support levels near .9225 and although we've seen a marginal break, we must wait and see whether the bears are able to engineer a bearish close below.
Major breaks on crosses should cause a re-think on AUD/USD, USD/JPY
GBP/JPY made a significant move higher last night breaking above monthly highs at 163.00. It's unusual for these big levels to break on the first time of asking, but if they do then watch out!
EUR/AUD made a more modest break above recent daily highs near 1.4550 but the up-trend looks to be back in place so buying dips now preferred.
I've been running GBP longs against the USD and the EUR and I think I should be adding to my portfolio by introducing GBP/JPY and GBP/AUD as well. I bought some AUD/USD overnight at .9265 and .9225 but I may have been a touch premature and will probably look to off-load this position on any intraday rallies. I still think it will bottom out somewhere near .9200 but I will get better bang for my buck from my long cable play.
USD/JPY: 1.7billion in option expiries at 101.00 later today
That normally means that prices will gravitate towards this level as the expiry time approaches (NY cut).
AUD/USD slides below 100-dma after RBA chief says intervention can be effective
Don't get too excited, they won't be doing it any-time soon. Stops now getting triggered below .9270 but I'm still looking to buy this dip.
GBP/JPY: Major resistance at 163.00
Huge level looming large for GBP/JPY at 163.00 (see chart). Normally these levels hold on the first test but watch out if it breaks.
USD/JPY: Very heavy turnover near 100.75
The interbank market is reporting some very heavy turnover near 100.75, which was a recent daily high. The next big technical level to watch above here is 101.55. I still think some of the Yen crosses look susceptible to deeper dips and that's why I'm not getting overly bullish on USD/JPY.
Elsewhere I'm still watching the AUD/USD and am hoping to buy a deeper dip towards .9225.
Nikkei moving higher taking USD/JPY towards resistance levels
Recent highs in USD/JPY at 100.55/60 are edging closer with a break higher in the Nikkei the catalyst.
The BOJ will release their latest rate decision this afternoon and perhaps there are some bets being placed that they may announce some unexpected measures? They would certainly be unexpected as nobody is talking about it.
China PMI and BOJ to add volatility today
There are no significant trends in control at the moment so the best we can look for is some short-term trading opportunities. Like I mentioned below in the AUD/USD, present markets favour range traders so patience will be required.
AUD/USD trade strategy
Overall I'm in the buy-big-dip camp but I think we may get a test of .9225 in coming days. I'm certainly not willing to go short unless I've got some profit in the trade, so this is how I'm thinking of approaching it (presuming nothing too unexpected happens).
- Look for break of support at .9280 and buy that dip with stops below .9200;
- If market rallies from there back towards .9400, sell and reverse the position with stops then above .9465;
- If we pick the swings correctly, cover shorts, reverse and increase long position on the final big dip towards .9225 again with stops well below .9200.
Trade ideas updated
- NZD/JPY: Hopefully you took advantage of the rally to 83.95 yesterday and the short-term target is 81.25. I think this pair is in consolidation so cover shorts on any significant dips and sell rallies now back towards 83.50.
- USD/CAD: Hasn't reacted to the Fed but still looks like a decent short-term buy ahead of 1.0425 (but I'm usually wrong on the CAD, thanks for reminders yesterday :) )
- EUR/GBP: I remain short and very bearish but support levels should be decent .8275/.8300 so don't be afraid to cover shorts on big dips and re-instate on rallies.
- Cable: I'm still long and bullish but sell orders yesterday were heavy between 1.6180/1.6200. It's certainly possible that we could see another dip below 1.5900 if the short-term USD bulls can muster some momentum, but every dip is a must-buy in my very biased opinion.
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There are a lot of cowboys in the market charging thousands for rubbish courses but this looks to be the polar opposite; a well credentialled course which costs nothing.
It's not until February next year but it might be worth registering for. Up to 12 hours of lectures from Bob Shiller of Yale University. In fact it probably wouldn't do anybody any harm to have a refresher.
Potential trade ideas for Asian session
- NZD/JPY: Could be worth selling near 84.00 with a tight stop, especially if USD/JPY stays below 100.55/60;
- USD/CAD: Buy near 1.0450 with stop below 1.0420.
USD/JPY: Don't fancy buying dips at these levels
Resistance at 100.50/55 is still looking quite formidable and I don't see much value in buying short-term dips whilst the sideways momentum remains so strong. The charts still look like 97.50/100.50 consolidation (see chart) and we need to wait for some strong market signals before changing this view.
NZD/JPY: Failure at 84.00 opens way for deeper pullback
Modest up-trend still in control but we could see a pullback towards 81.00 after resistance levels at 84.00 held firm again (see chart).
With NZD/USD showing a potential topping formation and with USD/JPY resistance confirmed at 100.50, selling rallies in the cross certainly seems like the path of least resistance.