AUD/USD: Leaving first t/p orders near .9200
The next batch of trailing stops seem to be going off above .9130 and I'm hopeful that I might squeeze a bit more juice out of this stone before the day is over. I've put in my first t/p order at .9190 as I want to reduce my position before the weekend anyway.
Edit: Good offers now being reported near .9150 which might slow progress?
GBP/AUD: Watch out if it falls below 1.6870
There is a short-term topping pattern in both EUR/AUD and GBP/AUD, but have a look at the daily picture for GBP/AUD (see chart). I know it's not clever to pre-empt any formations, but if this pair breaks cleanly below 1.6870 then we could get a sharp 700 pip sell-off?
If the cross does break down, wait for the AUD/USD to hit resistance levels and then sell the cable.
AUD/USD: Tight stops below .9080 could be endangered in early London trade
AUD/USD is starting to drift a bit in afternoon trade and dealers report trailing stops below .9080 which might get taken out. Dips are for buying imho and I'd look to buy near .9060/70 for a .9200 test later tonight.
Elsewhere, prime brokers are reporting very solid offers in EUR/USD near 1.3410/20.
RBA Report: If it's not dovish, that must be AUD bullish, or?
AUD/USD has edged a bit higher after the RBA monetary policy report was published. There were no surprises at all in it, but with the market short and in short-covering mode, the lack of any dovish headlines has encouraged some modest buying of the AUD.
AUD/JPY higher in early Tokyo
AUD/JPY is +0.3% in early trade and bottom-pickers will be hoping that previous resistance levels at 89.00/30 can be surmounted and put a base in place above the 86.25 Fibo.
I'm staying fairly neutral on this cross in the short-term, but longer-term I think we are trading at quite 'cheap' levels.
Sorry for sounding like a broken record, but I think this AUD short-covering story could become a big one in the next week or so.
EUR/USD: Plenty of stops expected through 1.3425
Market sentiment has been bearish in recent times and yet this pair keeps grinding higher. The daily chart shows a sideways trading bias with range tops near 1.3410/20. It's the nature of the move higher which suggests to me that we will get more topside. It's been a gradual grind higher and these sorts of moves are harder to turn around.
I expect to see a big fight happening above 1.3400 but watch for heavy trailing stops above 1.3425 and 1.3450. If they go off, we could see this pair trading close to 1.36 next week.
But, short-term bears will of course find excellent r/r in selling at 1.3410/20 with a tight-ish stop.
Outlook for major pairs August 9th: Trading focus to stay on the crosses
- USD/JPY: I'm still short and I remain bearish. Much will depend on short-term flows in the crosses but be patient and play as close to the edges of a 95/98 range as possible.
- AUD/JPY: Big technical levels at 86.25/89.00 and my bias is neutral on this pair.
- AUD/USD: I'm bullish and long; I expect prices to stay above .9030/40 with a target at .9300.
- AUD crosses: Topping formations in EUR/AUD and GBP/AUD. Selling rallies preferred.
- EUR/USD: Market has been trying to pick a top and there will be plenty of stops above 1.3425; my preference is to play from long side for now but be ready to sell exhaustive rallies.
- EUR/GBP near .8600 still, EUR/CHF 1.2250/1.2350 range trade.
AUD/USD confirms yesterday's bullish break
My long position is looking increasingly healthy and I'd expect prices to stay now above .9030/40, with an initial target at .9200. I'm not in any rush to book profits, as I think the big short squeeze is only just beginning.
It should be another busy day, with the RBA monetary policy statement and Chinese CPI on the calendar. Any positive news is likely to trigger further short-covering, so danger to the topside once again imho.
Good luck today and TGIF.
Levels to watch in early European trade
- AUD/USD: Expect this pair to stay now above .9025 and target more reported stops above .9110.
- USD/JPY: Asian session highs at 96.95 offer the first level of resistance whilst Japanese Trust banks are reported buyers below 96.25.
- Cable: Should be interesting again after yesterday's volatility and I'd play a 1.5465/1.5525 range in early European trade.
- EUR/USD: Option barrier at 1.3350 with stops above.
AUD/USD jumps to .9050 on China trade data
I've added to my long position and I expect short covering to now pick up steam. The sharp increase in both imports and exports will encourage many that the global economy isn't as sick as they had feared and should benefit risk trades like the AUD.
If short-covering really accelerates, then I think we could see levels near .9200 later today.
USD/JPY eases bit lower after BOJ keeps policy steady
No major developments for the USD/JPY bulls from the latest BOJ meeting and USD/JPY has eased back towards 96.50. Dealers report sizeable stops below 96.00 which might soon come into focus.
AUD retraces earlier gains after jobs data
The unemployment rate fell slightly but the economy created less jobs and the AUD/USD has given back all of its earlier gains to sit back at opening levels near .8990. The big levels to watch are still .8920/.9050 and everything in between can be considered noise.
Chinese trade data due out shortly I believe.
AUD on the move early
Overnight highs above .9020 have been taken out and the bears will be getting worried. I'm looking to add to overnight longs near .9040; I know its dangerous buying breaks in a bear market but I think the circumstances are exceptional. I'm looking for a base to start forming now .8990/00.
Old cable traders made to feel young again; and cable heading higher
It was a crazy trading period for the cable whilst the BOE were issuing their forward guidance. It fell by 150 pips, and then rallied 300, and that's not to mention all the mini moves in between. Made me feel like a 25 year-old spot dealer again :)
What I gleaned from the price action is that the market is bearish but wrong!
Personally I think the cable bears should start forgetting about levels below 1.45 and come to the realisation that the GBP is heavily over-sold already on historical indicators (GBP/AUD, EUR/GBP to mention two) and is due for a big bounce. I'm looking to re-instate longs on any dips back towards 1.5300.
USD/JPY: Still bearish but cover shorts ahead of BOJ
I'm still short of USD/JPY and with the really big players selling in recent days, I'm in no big hurry to cover. However, we should see some volatility today with plenty of risk events on the economic calendar and buying any decent intraday dips towards 95.50 makes good trading sense. There is technical support starting at 95.00 which will attract more macro profit takers.
Trend is still bearish, so selling rallies the preferred strategy, but wide 95.25/97.75 range trading is certainly possible.
AUD/USD: Big day of data; one good piece will start short-covering binge
- It's a big day of data with Australian jobs, Chinese trade, and of course the BOJ rate decision.
- The market is very short of AUD across the board, more so again after the bearish break yesterday in AUD/JPY.
- We've already seen JPY longs get targeted in thinning holiday markets, and it will only take one piece of good data to send the massive AUD shorts scurrying.
- Longs in play with stop below .8910, looking to add above .9040.
Aug 8th: USD bulls getting squeezed as liquidity diminishes
- USD/JPY has continued with it's slide south as trailing stops seem to get triggered every 50 pips in a market caught long. There is little in the way of technical support until 95.00 so selling short-term rallies is still favoured until we get there. I'm still short and in no hurry to cover.
- AUD/USD has held up reasonably well despite the heavy AUD/JPY selling and though the bears are still in control here, a break back above .9050 will change the outlook. I'm long again and will add on a bullish break, with stops now below .8910.
- Cable had a wild old ride last night falling to 1.5210 before screaming 300 pips higher! I've booked profits on my long position here at 1.5500 and will look for dip-buying opportunities.
- EUR/USD is challenging the barrier at 1.3350 and these things eventually break. But, resistance should be super-firm near 1.3400/25 so I'm thinking there are better pairs to play the USD-bear card.
Cable: Back to the good old, wild old days
Sorry but I've been tied up with admin surrounding the chat-room but I've obviously been watching the gyrations in cable with interest. It used to be like this all the time, up and down 150/250 pips and then finishing in same place! I wouldn't read too much into these sorts of moves, apart from the fact that the market is undecided.
I'm still small long, best to let things settle down before making any big decisions. But, if the rally keeps going to silly levels near 1.55, then I'll sell and look to re-buy dips.