AUD crosses picking up more momentum

Firstly it was AUD/JPY forming a possible base (see chart) and now the AUD is starting to look very strong against the EUR.

The EUR/AUD daily chart (see chart) looks to have a strong topping pattern with resistance levels now at 1.4450. Prime broker reports show more stops below 1.4300.

AUD/USD looks to be stalling at an interim trendline and sideways consolidation looks likely. AUD demand on the crosses being balanced by USD demand across the board.

by Sean Lee

Asian market open, Friday September 6th

FXWW Asia Open Briefing 06-09-2013

Apologies for the under-reporting this week but been a bit 'fluey'. TGIF!

USD was king overnight but overall it looks to me like some classic adjustments in the crosses with the AUD and GBP benefitting at the expense of the EUR and the JPY. Most interest now will revolve around USD/JPY and Tokyo's reaction to levels above 100.00

Good luck today.

 

by Sean Lee

USD/JPY: Waiting, waiting, waiting...

We are sitting just below what many see as a pivotal short-term directional level at 100.00. Hedge funds have returned from their August holidays with a strong desire to drive this pair higher so we will have to wait and see what their conviction is like. The short-term market is probably long already but they are hoping that corporate demand is strong enough to trigger option-related stops above 100.10.

I'd still prefer to be long rather than short but I don't like trading static markets so prefer to wait until the movement gets underway.

by Sean Lee

Cable: Looks very constructive but needs to break above 1.5750

As you know I'm bullish on the GBP, long against both the USD and the EUR at present. I only sold a small amount of EUR/GBP and am looking for technical entry levels to increase this position. The levels in cable are much more clear-cut (see chart) and the daily chart continues to look very constructive but it needs to break above 1.5800 to generate fresh momentum.

With very strong economic data in recent weeks out of the UK, I see no reason to sell GBP at present especially given that it's still at historically quite-low levels on the crosses.

 

by Sean Lee

AUD/JPY: Strong technical set-up, support/resistance at 90/93

No reason to jump off the bull train here. The clear technical target is at 93.00 and support lines are also very clear at 90.00 (see chart). Looking to further reduce long positions on any approach to 93.00 with the intention of re-buying on dips. Much of course will depend on the market reaction to what happens at 100.00 in USD/JPY.

by Sean Lee

Asian market open, Thursday September 5th

Morning all, you can read Milan's overview of overnight events here FXWW Asia Open Briefing 05-09-2013

The AUD is still in recovery mode with heavy short-covering ahead of the election. AUD/JPY is targeting 93.00 and AUD/USD has a technical target at .9320.

USD/JPY still consolidating below 100.00 and gathering strength for the next push higher and the GBP is also staying strong after recent improvements in economic data.

by Sean Lee

European open

You can read Milan's excellent open briefing here; FXWW European Open Briefing 04-09-2013

by Sean Lee

AUD/JPY: Clear target now at 93.05

The double-bottom formation  just above a 61.8% Fibo allied with short-covering ahead of the election has had the desired affect (for us bulls that is) and there is now a clear technical target at 93.05 (see chart).

I booked some partial profits yesterday at 89.70 on average and although I wish I still had the whole position now, it made sense at the time. I will be patient now and wait for 93.00 before booking more profits. If USD/JPY breaks through 100.00, then we will see 93.00 in AUD/JPY very quickly imho.

by Sean Lee

EUR/USD: Dominated by Sovereign flows; MAs provide technical support

  • ACBs reported selling rallies as reserve re-balancing continues post USD/AXJ intervention;
  • Sovereign wealth funds noted buyers on dips;
  • 100 and 200-day MAs providing technical support levels 1.3135/45;
  • EUR remains soft on crosses especially against AUD and GBP;
  • EUR/GBP large barrier at .8400 could prove magnetic.

by Sean Lee

AUD: Bullish across board but AUD/USD hitting the wall

  • Strong technical break in AUD/JPY, but confirmation needed (see chart);
  • Technical resistance in AUD/USD at .9060/70 holding for now (see chart);
  • AUD/NZD played catch-up and is targeting first Fibo resistance at 1.1760, playing ranges favoured;
  • EUR/AUD is targeting important support at 1.4350, playing ranges favoured;
  • ACBs reportedly selling AUD/USD rallies as reserve re-balancing continues;
  • RBA was extremely neutral yesterday, GDP data today;

Much will depend on what happens in USD/JPY I feel. If it breaks 100 then the USD will go bid across the board and that will drive AUD/USD lower initially but AUD/JPY buyers will undoubtedly be waiting to buy dips. Overall, stay long AUD ahead of election weekend but pick your levels carefully against the USD.

by Sean Lee

USD/JPY holds the key again; bias still very bullish

  • Massive optionality at 100.00;
  • Heavy stops directly above 100.10;
  • ACBs reportedly buying dips but trailing stops below 99.20;
  • AUD/JPY has made a strong technical break higher.

Risk-reward favours the bulls but I prefer some range trading first, maybe 99.10/90 on outside, with a strong bullish bias.

by Sean Lee

Asian market open

Here's Milan's excellent wrap FXWW Asia Open Briefing 04-09-2013.

Pretty strong close in AUD/JPY above 90.10 resistance but will need to wait for some added confirmation. Obviously USD/JPY and the big optionality at 100.00 will be an important factor today. Australian GDP will also add to volatility.

by Sean Lee

EUR/GBP: Talk of a barrier at .8450

Lots of people trying to pick a base in this pair which usually means its headed lower. There will be some protection ahead of .8450 with stops below.

Cable looks very constructive to me and I expect a test of 1.5760 in coming days.

(Talking my position as always, but if I don't.....).

by Sean Lee

RBA sticks to script; AUD slightly higher

The AUD/USD is back above .9000 after the RBA left rates unchanged and kept the statement language pretty much unchanged as well.

AUD/JPY has rebounded back toward session highs but will probably struggle again on the approach to 90.00/10.

by Sean Lee

USD/JPY running into plentiful supply above 99.65

  • Corporate offers are capping for now with more seen at 99.70, 99.80 and 100.00;
  • Option-related selling also noted ahead of 100.00;
  • Large option-related stops above 100.10;
  • Few trailing stops now below 99.20.

by Sean Lee

Early morning chat-room chatter

12:15:55 amThe EUR is drifting off into some sovereign bids between 1.3190-80 but stops are placed below. Some buying interest noted at 1.3160 in front of Chart support at 1.3140.. A break there seen as significant.

2:11:26 amModel funds sold EUR/USD earlier but failed to trigger sub-1.3180 stops

2:12:04 amexporter offers at 99.50 in USD/JPY capping rally for now...but liquidity is thin & trading interest low...so no chance for momentum to build anyway

2:18:20 amNouriel Roubini - The main risks to the global economy in the coming months http://www.project-syndicate.org/commentary/the-main-risks-to-the-global-economy-in-the-coming-months-by-nouriel-roubini

2:21:09 amFX Heatmap (vs USD): NZD (+1.20 %), AUD (+1.00 %), GBP (+ 0.40 %), EUR (-0.02 %), CAD (-0.03 %), CHF (-0.35 %), JPY (-1.20 %)

4:25:11 am-------------

Sep 3

Mary McNamara

6:22:35 amA/U: price was always going to 'park' near the 0.90 level. This level would have tempted many to SHORT given it was the 61.8% pullback level from last week's high. I'm wondering if a 'hold' on interest rates today might help to lift this further though? What are the fundamental people thinking/seeing?

6:22:35 amAU4hr.jpg

Sep 3

Sean Lee FXWW

6:58:16 amMorning all. Positioning is main factor at play IMHO Mary with election looming. Can the bears hold their nerve?

Sep 3

FXWW 303 fxww.com

7:21:36 amMorning, with a triangle break at 98.95 in doll yn with a 110 objective and Ichi moku daily close above the cloud one better close ones eyes and buy.. Right. ?

Sep 3

Sean Lee FXWW

7:25:38 amAgree 303, don't think about it, just do it

Sep 3

FXWW 42 FXWW Pty Ltd

7:26:47 amHi all, my personal take is that RBA will not/can not abandon easing bias narrative if they are to defend a cheap $A. Rate cuts are not imminent - latest indicators support the case-, which gives a good excuse to see AUD recovering some ground. However, bounces stil to bel short-lived in my view and selling on strength name of the game.

7:26:56 amAs long as RBA does not communicate cut though, playing 0.89/0.92 edges looks pretty safe... although still feels safer to sell on strength. Was more optimistic on AUDUSD early aug, but since twin topside failure at 0.9230, i grew more skeptical...

7:29:39 amDoll Yen, with the solid close near day highs arguing for higher targets ahead, I will be looking to rejoin uptrend on retracements... Hopefully we get an opportunity later today

7:33:58 am€/$ looking vulnerable to a breakout lower, with later bounce off 1.3180 failing to regain latest Friday swing high. But with NFP Friday, risk is not much follow thru seen, so it might be a case of fading potential break?

Sep 3

FXWW 888 FXWW Pty Ltd

7:34:35 amthx 42.. some strange aud price action there

7:34:59 amthink maybe euraud stops run- is breaking below trendline here

Sep 3

Sean Lee FXWW

7:35:39 amcertainly right time of day to be triggering stops

Sep 3

FXWW 42 FXWW Pty Ltd

7:38:45 amI will be carefully looking to see how NZDUSD behaves btw 7840/75, if breaks above the latter I think Kiwi might see further strength ahead, if failure here, pair still showing characteristic of a potential legitimate breakout to lower levels...

Sep 3

FXWW 888 FXWW Pty Ltd

7:47:16 amsme one trying to buy decent clip of aud here

Sep 3

Sean Lee FXWW

7:51:10 amEUR/USD bids reportedly very solid 1.3165/70; PB

Sep 3

FXWW 888 FXWW Pty Ltd

7:52:58 amrun into some audnzd supply and they scrambling for the kiwi leg

Sep 3

FXWW 303 fxww.com

7:54:22 amLook at aud yn down trend line from 105.45.. Coming in here at 89.50 cud open up more s/l buying

Sep 3

FXWW 888 FXWW Pty Ltd

8:03:57 amthx 303....here's what u are looking at i think (altho not sure u can view it)
https://www.tradingview.com/x/yBhdjqmF/

Sep 3

FXWW 303 fxww.com

8:05:22 amksbuying tks, I try not to pre-empty breaks but it's always tempting

Sep 3

FXWW 888 FXWW Pty Ltd

8:09:46 amalso of interest is this EURAUD chart... break of 1.4750 lvl yesterday putting a top in place- and now looks like we are breaking uptrend from July...(on a longer term chart also, somewhere around here is a break of the major uptrend from down around 1.20)
https://www.tradingview.com/x/EdjAJjMe/
I'll post some further analysis soon from a more fundamental standpoint

8:19:34 amAfter a 23% rise since the low in April, EURAUD has failed to break 1.50, and we now see room for a bigger decline back towards 1.42 area. Technically EURAUD is just breaking the uptrend line from April. Fundamentally, many of the reasons behind AUD weakness - China slowing, weak domestic earnings, lower mining revenues, and subsequently lower rate projections - have now been fully priced and are even reversing. On 7th Aug, the day after RBA cut rates, OIS was pricing 34bps of further cuts by the March 2014 meeting. That has now moved to only 22bps. Equally, the narrowing of periphery spreads in Europe that supported EUR$ seems to have run it's course as Greek problems and uncertainty around German support post their election (Sept 22) resurface.

There has also been uncertainty into the Australian elections this weekend (7th Sept), but polls show Abbott's opposition Coalition party are now 6% ahead of the Labour party. A clear result should boost confidence. Furthermore, this morning Abbot stated he would break the emissions pledge, saying he would repeal the carbox tax ( http://bit.ly/14ROtX6 ) and revealed A$31bn in spending cuts.

It is also apparent positioning is at extremes (see relative IMM positioning chart 2), and commodity prices a have bounced in the past couple of months (chart 3), following sharp falls around the middle of the year. The RBA commodity price index, released today, showed a rise of +1.2% in August (in USD) following a rise in July. Base metal and iron ore prices rose, supported by rising demand from China. (see report: https://www.research.hsbc.com/midas/Res/RDV?p=pdf&key=ztDn3I6UfU&n=385215.PDF Paul Bloxham)

8:19:59 amEURAUD.jpg

8:23:19 amwell that kiwi didnt like it up there

8:23:52 amactually thought it was at risk of going 60 bid

Sep 3

Sean Lee FXWW

8:33:23 am[Screenshot0] | [DesktopObject0] Australian commodity index at 15-mth highs; Reuters report

8:52:13 amUSD/JPY: Technical break yesterday out of wedge implies more gains ahead but overnight bank reports suggest corp offers starting 99.60/65 and optionality at 100.00. We could easily see a pull-back to 98.80ish before higher? I favour 98.80/99.80 range trade for next few sessions but with bullish bias for sure

by Sean Lee

AUD/JPY: Taking some profit off the table

I'm lucky that I got into this trade at a really good average entry and so I'm happy to start booking profits after a nice 230 pip run. I've sold smalls at 89.60 and will look to sell some more near 89.80, just to lighten up ahead of retail sales and RBA. (Edit: Offer filled at 89.80)

If it breaks straight higher, then the double-bottom will confirm and I will revert to dip-buying mode.

by Sean Lee

USD/JPY: Likely to run into headwinds ahead of 100.00

  • Heavy optionality expected at 100.00;
  • Corporate sell orders starting at 99.60/65;
  • Break out of wedge formation implies more gains ahead but we could easily see a pull-back towards 98.60ish first (see chart).

by Sean Lee