EUR/AUD, GBP/AUD set to reverse?
Two separate technicians, who are usually very insightful, are telling me that these two crosses are heavily overbought on a short-to-medium time-frame. Of course they have a captive audience knowing that I'm long AUD/USD!
Looking at EUR/AUD, there is a top in place at 1.4450/75 but it's Friday and we are not that far away from there. I don't like the idea of selling here at 1.4375; best to wait and see if we get another topside test to take out likely stops above 1.4480 and then sell into that spike near 1.4500/25?
I'd take a similar approach to GBP/AUD; resistance levels are further away there at 1.6900 making sales at present levels near 1.6700 much less attractive. Wait for any stop-loss driven spikes up through resistance levels and sell into that for a move back below 1.65.
Don't jump in this morning, wait and see if volatility returns
The market has been bullish USD on the back of expected QE tapering for some months now. The article in the WSJ by renowned Fed-watcher Hilsenrath titled "Fed likely to consider refining easy-money message" will have spooked some of the USD bulls. I think it's now a matter of wait and see for a few hours as present levels don't look particularly attractive in any of the major pairs:
- AUD/USD is still between important technical levels at .9130/.9350. We are currently in the middle of this range but if the USD bulls start booking profits then the danger is definitely to the topside. On the other hand, cross pairs like AUD/NZD remain weak and if we get some risk aversion and the Yen crosses fall, that would also weigh on the AUD/USD. So buying big dips is still my strategy but if the market can't break below .9220/30 then I'd consider buying a bit earlier. Hope that makes sense.
- EUR/USD is nearing the upper end of its sideways range between 1.2750/1.3400 and this is not the place to be getting bullish. Keep an eye on EUR/AUD and EUR/JPY for short-term signs of topping!
- Cable will probably follow the EUR/USD to a large degree and EUR/GBP remains bullish whilst still above .8550.
- USD/JPY as mentioned below could get very volatile but I prefer to sell rallies in expectation of some risk-off and USD-bearish sessions.
USD/JPY: We could be in for more nasty swings
I think the day-traders have better chances than the position takers in USD/JPY as it seems to change its direction at the least expected moments. I'm not even going to try and pick levels, we need to be glued to the screens to trade this.
I'm still overall bearish USD but I'm not sure what Yen crosses will do so I'm a bit wary of getting involved. Sell-bias intraday I'd suggest with an initial target at 98.25.
NZD/USD technicals: Strong close above .8060 suggests more gains ahead
Resistance at .8060 (see chart) was supposed to be strong but it was easily broken and we are closing above there. The next level to watch in my opinion is at .8180, prior lows and a 50% retracement.
AUD/NZD has closed below 1.1500 and the next technical target there is at 1.1385.
AUD/USD: Sticking with longs, headed for 96 cents in next few weeks
Support levels near .9130/50 held yesterday despite some very heavy pressure and with the USD taking a beating across the board, we can expect a test of vital resistance levels at .9330/50 at some stage today. I believe a base is in place, this resistance will break and we will be trading close to more neutral levels around 96 cents in a few weeks.
Short-term parameters probably .9230/.9300 in early trade.
Thanks very much to those who came along last night, it was nice to get away from the screens for a while. If my trades keep performing so well after get-togethers, we might have to plan one every evening :)
USD/JPY: Decent sized bids reported near 100.00
Our hedge fund insider @FXWW888 is reporting that there are some decent-sized bids at 100.00 which have soaked up the first attempt to break below the big psychological level.
Sorry, I've got no idea where its going.
AUD/NZD the main mover in quiet Asian trade
The RBNZ no-decision was the main event today and even though this was expected, the fact that the hawks saw some promising signs has helped the NZD rally.
AUD/NZD was the big mover taking out support at 1.1500 and staying below there for much of the session.
The AUD is under pressure on other fronts as well, both against the USD and the EUR.
AUD/USD: Added to longs in early trade
Of course the AUD always looks worst at the bottom and it looks so bad now, surely this must be a major low? AUD/NZD is on its knees, EUR/AUD is on its highs, but these moves are being driven by speculative market sentiment not by any major shift on the economic or political fronts.
I've been swing-trading my long position for a few days now and am quite comfortable increasing near .9150. I'm playing safe though, I will reduce the position sharply below .9110 as if we see those levels then we will probably get a re-test of 90 cents.
Get-together for Sydney regulars later today
A few of the die-hard regulars are meeting up this evening to tell a few lies, from about 6pm-9pm in North Sydney :) Let me know if you don't have the details and I'll pop you an email.
EUR/JPY orders: Decent selling interest 132.80/00
These orders look like some clever guys looking to book at least partial profits and it's not guys taking fresh shorts. The obvious technical target on the cross is recent highs near 134.00.
AUD/USD: Longs should keep intraday stops below .9125
AUD/NZD has taken out 1.1500 after the RBNZ and we now must wait and see what the market reaction will be. If you're playing AUD/USD from the long-side intraday, I'd now keep stops below overnight lows and best below .9125 as a break below there targets .9040.
AUD/NZD sitting just above 1.1500 ahead of the RBNZ
The AUD is back towards the lower end of recent ranges against most of the other majors, after Chinese PMI again fuelled the bears appetites. There have been many reports over the last few days of very solid support in AUD/NZD near 1.1500, but it's possible that these orders might cancel ahead of the RBNZ? A clean break below 1.1500 would open the way for a move to 1.1200. If support holds, look for a sharp short-covering rally towards 1.1700.
AUD/USD finally stalled overnight near .9135 but a clean break below there would open the way for another 100 pip fall (see chart).
Keep a close eye on AUD/NZD; if 1.1500 holds then we can try buying AUD/USD intraday looking for a 100 pip rally. BUT, if support in the cross breaks and AUD/USD breaches .9130, then put on your rally-selling cap.
Elsewhere, EUR/AUD needs close watching as well as we are back trading at 1.4400.
EUR crosses higher across the board
EUR/JPY has taken out resistance near 132.10/20 (see chart) and has its eyes of recent highs near 134.00. EUR/AUD of course had its earlier surge and even EUR/CHF has joined in to a lesser degree. If half-decent German PMI cause this reaction, what will happen when some really good news breaks!
EUR/AUD surging in early Europe
Apologies but I think I've mis-read the short-term market and the AUD bears are alive and growling. EUR/AUD is 100 pips higher in the last 90 minutes of trade and is closing in on previously vital resistance levels near 1.4400. Looks like the German PMI/Chinese PMI cross.
AUD/USD: Another topside test favoured in early London
We've got to remember that overall market sentiment remains bearish on the AUD but also that positioning is heavily short. We saw the first resistance level get taken out at .9305 after the CPI data put an August rate cut in doubt and then the bears returned in force after the HSBC data, selling the AUD aggressively.
But where to now for the AUD? The China data was bad, its now history, and the market is still short! In addition to this, real-money buyers have returned and there is still less liklihood of a rate cut in August!
I really think the AUD goes higher, talking my position as always, but in this case the market reactions would seem to be supporting me.
AUD slightly lower after mixed data dump
The chances of an August rate cut have receded somewhat after the earlier CPI data and the poor Chinese PMI has sent the AUD lower.
Overall range trading still dominating so play the edges of the .9150/.9330 range.
@FXWW888 has been reporting over recent sessions that real money demand for the AUD is sharply increasing, always an interesting development.
NZD/USD: Strong data but looks like plenty of sellers about
Maybe it's the drop in exports which is limiting enthusiasm but I would have thought that a much better than expected trade balance would have elicited more than a 10 pip rally in the Kiwi! Maybe there are plenty of willing sellers around the place?
The 4-hour charts are showing a possible trading channel and the bears can now consider selling into the top of this (see chart), especially given the reaction to the data.