I’ve got a long cable position which is well out of the money and I know of a few other traders who are sitting on long AUD/USD positions and we are all asking ourselves the same question; when should we panic?
The market is undoubtedly very bullish on the USD and I don’t think this will change any-time soon but I’m still very much of the view that the EUR and GBP crosses are likely to trade higher so big dips in cable and EUR/USD are buying opportunities. AUD/USD is a slightly different animal in my view, as many asset managers are still very long of Australian assets and therefore opens the A$ up to further downside moves. That said, I’d be surprised if the AUD/USD trades much below .9550 in the short-ish term.
My view is that USD/CHF will trade aggressively higher, EUR/USD will range trade probably between 1.25/1.30, Cable will also range although we just gotta find the parameters, and the AUD/USD will find another 10 big figure range for the next few months, probably .92/1.02 or something like that. USD/JPY should be toppy near 104 but with corporate demand so strong I’m not totally confident on that call.