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Citi Techs recommend short GBP/AUD position
By Sean Lee || September 2, 2010 at 21:57 GMT
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Sure GBP/AUD is in a definite short-term downtrend and it has been since 1.76 but to start selling on the 1.68 handle,when the risk of a retracement rally would seem to be very high, is certainly a risky proposition. The break below the 61.8% retracement level is also a bearish sign and suggests a possible full-retracement to 1.62 but it’s certainly not conclusive.
Personally I’d prefer to try buying dips in line with the uptrend which began in May at 1.62. Neither side of the market would seem to have a particular advantage here so jumping into any trade mid-stream seems a bit reckless to me.
Sean, I asked Jamie earlier what his take was on the AUD/USD. What’s your current take since you are a AUD fan? Thanks, Jeff
Sean,
Unless USDCHF shows decent bottoming signs, EURCHF will be pressured. Hope market bottoms for USDCHF which means chfjpy will be enormous. USDJPY will be under pressure from the faster moving of these two currencies.
I’m in the sell-rally camp at current levels Jeff. I think we are in an 8850/9350 range for now and I prefer to sell towards the top of this range. I’m no fan of the USD but I feel the AUD is heavily overvalued on the crosses.
USDCHF and CHFJPY trade inversely.Now, which of which move faster?
I agree there Aziz, I think we need to be patient and we may miss the top in the CHF but I’d rather wait for some confo that EUR/CHF or USD/CHF have bottomed before committing anything substantial.
Sean,
Your thoughts on EUR/GBP and EUR/AUD for tommorrow. I’m thinking of shorting Eur/gbp above .8360, but it looks slightly bullish. On the EUR/AUD I entered a counter trend trade at 1.4060, with a half normal stake. Looked like an opportunity for at least 60-80 pips. Had two trendlines to place my stop below. Up about 34 now. This pair seems very sensitive to risk, it dropped 60 pips on the ISM index the other day. I’ve been trading it about a month with 80% success. Any hints on the pair?
thanks from Michigan USA
neal
Sean, I prefer to look at the majors involved in the cross, since the action in the majors determines what happens to the cross, except for brief periods of dislocation. The GBPUSD seems to be on a downtrend, and the EURUSD has certainly been well bid the past few days, so the cross GBPAUD should head down.
Hi Neal. EUR/AUD as you probably know, I’m cautiously bullish on in that I think the next big move is up but I’m not sure on the timing. EUR/GBP should be bullish on a break above 8280 but a good friend who sees good flows thinks we should wait and see what happens between 8350.8400. Wait and see if it stalls there for a session or two then sell with a fairly tight stop above 8400 is his recommendation. So I guess that sounds like an 8280/8380 range trade!
Cheers Pandu. You’re right the s/t GBP/AUD trend is definitely down- the question is has it a long way more to fall or is it soon to be exhausted.
thanks Sean!!