AUD/USD: Big level to watch is .9330/40
There are recent highs nearby at .9300 but I think the really important level is .9330/40. This was a previous low which once broken, has still not been regained. I'm hearing that there are plenty of 'call levels' above .9350 and I'm guessing that these guys are short and start getting worried if prices get back above.
I'm still long but will reduce my position at .9330 and look to re-buy on 150 pip dips.
Gold: Close above $1340 will keep bulls interested
Gold continues to look quite bullish and the close above $1340 (see chart) opens the way up for gains back towards $1415 and possible $1485. Bears should keep their ammunition dry for these levels.
Asian open: Metals still hold the key as USD stays soft; busy day of data ahead
Not a lot of movement overnight in the FX market but its interesting to see that USD/CAD was one of the bigger movers, indicating that the market is squarely focused on events in the commodity markets. This could be due to a lack of any other focus or it could be that major events are brewing in the precious metals and commodities spaces.
AUD/USD failed to break new ground and only a clean break above .9350 will have the bears getting worried.
It will be a busy day for the economic calendar. NZ and Japanese trade data, Australian CPI and Chinese PMI should all add to market volatility.
Good luck.
AUD/NZD: Good support still expected near 1.1500
I'm still hearing that there will be good support near 1.1500 in the Antipodean cross, might be a barrier but that's a guess on my part. Resistance levels are very clear above 1.1750 and with range trading favoured, we might get some decent swing trading opportunities.
Quiet session in Asia apart from few stop-loss runs in Yen crosses
The market had a go at some stops in USD/JPY below 99.20 and in EUR/JPY below 131.00 but apart from that it's been pretty quiet. Much of the focus was on the Gold market and talk of stops above $1340 but the precious metal market stayed very quiet.
AUD/USD failed to challenge recent highs at .9300 and is starting to retrace as intraday longs give up. Most of the major bank research that I've been reading today remains very bearish on AUD/USD and perhaps that's having an impact at the moment.
There isn't much of note on the European economic calendar and we may be in for another quiet session.
EUR/GBP: Technical support at .8560
The 61.8% retracement of the rally from .8470 to .8710 comes in near .8560 (see chart) and these levels will need to hold if the bulls are to hold any hope of a medium-term move towards .9000.
AUD/USD: Sneaking higher to test recent highs at .9300
The big level to watch in my opinion is .9325, which has provided strong resistance since it broke to downside in early June.
I still think it's wise to reduce long-profits near there just in case we get some sideways consolidation between there and .9150.
Levels to watch through the Asian open
- USD/JPY: More stops reported below 99.20 through 98.80 (@FXWW888). Edit, some just triggered below 20).
- AUD/USD: Recent highs near .9300.
- EUR/GBP: Technical support at .8570.
USD/JPY should continue to drift lower but....
Plenty of conflicting forces at play in the Yen pairs which should ensure volatility, but not all in the same direction.
- Rise in metal prices should stoke up some risk-aversion across financial markets which in turn is bearish for Yen crosses.
- But, pairs like EUR/JPY and AUD/JPY are still looking technically constructive so no need to panic sell there.
- The USD is falling out of favour again with tapering on the back burner, and with the market sitting long USD already we may see more profit taking ahead of the August holiday period.
- But, yesterday's election gave the Japanese PM a mandate to continue with expansionist monetary policy which will be Yen negative.
The strongest of these 4 factors in my mind is the pre-holiday positioning, so I'd expect to see a slow, sideways/lower drift over the coming weeks.
Don't be short CHF if metals are rallying
I cut my long EUR/CHF position yesterday for a tiny loss once the precious metals started rising. I don't think it's the right time to be short any of the commodity currencies (AUD, NZD, CAD or CHF) if precious metals are rising.
The USD will be the biggest loser out of this market phase whilst the EUR would also be expected to lose out on the crosses.
AUD/USD: Look for .9330 test today
I will look to book some interim profit at .9330, which has been a very important pivot (see chart) in the recent past. The broader market is still bearish AUD so I'm sure the bears will re-group at this big level. Even if it does break I'm sure I will get plenty of dips to re-buy on, but as always let's see how the market develops before committing 100% to any particular strategy.
The break higher in precious metals is an important event and it will have major implications for the USD in particular. Good luck today.
EUR/USD: Likely to test 1.3400 over few days
Despite political unrest in Portugal, the market seems to be quite happy buying EUR or at least is in no rush to get short. The crosses are all looking reasonably stable at present and the charts show us the same old picture, sideways trade inside a well-worn range between 1.2750 and 1.3400.
Given that the short-term trend is bullish, I'd suggest buying any 100-pip dips over the next few days in expectation of a move towards the upper end of the range. Then you can try selling again when everyone else gets bullish at the top!
EUR/GBP: Bulls will need .8570 to hold
If EUR/GBP bulls are hoping for more gains then they should expect a 61.8% pull-back level at .8570 to hold (see chart). Prices are currently chopping sideways near previous highs at .8590/.8600.
HSBC released a bearish analysis piece on the cable today but once again I find myself disagreeing completely with what the big-bank analysts have to say. I'm staying bullish cable and bearish EUR/GBP but I'm also the first to admit that my timing in these pairs hasn't been great recently.
EUR/CHF: Chopping my longs for tiny loss as risk-aversion returns
I'm giving up on this pair yet again and taking my 20 pip loss. I bought a small position last week at 1.2375 but the rally in Gold and Silver has me a little worried that the risk-aversion trades might take over in the FX market so I've sold out at 1.2355.
EUR/JPY is 50 pips lower on the session, a mixture of risk-aversion and 'buy-rumour-sell-fact' reaction to the Japanese election. I'd like to try selling this pair again but after being stopped out of a short position last week, I'm leaving it alone for now.
Gold consolidating earlier gains above $1300
If you're tempted to sell the Gold stuff, then keep your stops fairly tight above $1325 as it certainly feels as if something major is about to happen in the commodity markets. News of the Fed review followed closely by this front-page article in The NY Times should ensure that commodity markets stay in the headlines for a few days to come.
USD/JPY takes out most of stops below 100.00
Most of the stops I mentioned earlier below 100.00 have now been done. The high in early interbank trade was 101.05 but the high officially after 5am Sydney was at 100.74.
AUD edging higher on back of metals rally
I'm talking my position as usual but I think this move in precious metals is an important one and I would caution against AUD shorts at current levels. Remember that we have come down from 1.06 and there is a time and place to be short any currency pair, and I think present levels are neither for the AUD/USD.
Gold higher in early trade
The initial reaction to the Fed's review decision has been to send Gold higher, presently trading back above $1300 and up 1.5% from Fridays close. Silver is also on the move, also +1.5% in very early trade.
Next resistance in Gold is a previous low at $1325 and a break above there is likely to set off some trailing stops.