ForexLive » Techs

Risk on or off? Have a look at AUD/CHF

Sean Lee — Fri, 03 Sep 2010 01:06:48 +0000

There can surely be no currency pair which gives a better indication of how the market is assessing the risk trade than AUD/CHF. If China is booming, the world economic prospects seem good and the AUD is rallying. If doom-and-gloom are preoccupying peoples thoughts, then the CHF is rallying.

A quick look at the long-term AUD/CHF chart shows that risk in general has been back in favour since March 2008 but it took a turn in May this year. The 38.2% retracement of the big upmove came in at .8925 and that has proven to be good support thus far. If we break back below there then risk would seem to be off again and we could fall as far as .8150 when the risk trades should find new support. If the .8925 recent low and and now trendline support were to hold firm, then we should be looking to a major rally in all risk trades over the next few months.

Definitely a pair at least worth watching if not trading.

Citi Techs recommend short GBP/AUD position

Sean Lee — Thu, 02 Sep 2010 21:57:35 +0000

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.

AUD/USD technicals: Long term outlook still undecided

Sean Lee — Wed, 01 Sep 2010 21:42:37 +0000

It can be beneficial to take a step backwards and look at the overall picture. The weekly chart shows some strong resistance at .9400 and a more recent bullish trendline coming in around .8800. I’d expect these parameters to hold for the next few weeks and playing as close to the edges as possible seems like a sensible strategy.

AUD/JPY technicals: Still in wedge consolidation pattern

Sean Lee — Wed, 01 Sep 2010 03:11:17 +0000

AUD/JPY is 1.5% higher on the day but a quick look at the daily chart shows us that this pair is still roughly in the middle of a consolidative wedge pattern with parameters at 73.50 and 78.50. Having stalled at a major 61.8% level at 88.00 and then initiated a downtrend, this wedge pattern is expected to break lower rather than higher over the next few weeks. The bearish long term MAs would also suggest more downside.

EUR/JPY consolidating above 107.30

Sean Lee — Thu, 26 Aug 2010 03:23:17 +0000

The previous low at 107.30 had the potential to act as a strong resistance level but that has now been negated by the solid consolidation above there.

Next major technical resistance in EUR/JPY is 109.00, which is also a previous low and the 38.2% retracement of 114.70/105.50.

AUD/JPY technicals: Bearish but not broken down yet

Sean Lee — Tue, 24 Aug 2010 21:38:47 +0000

The bottom of the consolidative wedge pattern comes in around 73.40 and a clean break below there, and especially below 72.60, will confirm that the downtrend is back in control. Shorts definitely preferred on a medium term basis but I prefer to wait for the break lower or else sell rallies.

AUD/JPY testing hourly support

Sean Lee — Tue, 24 Aug 2010 01:39:16 +0000

AUD/JPY is currently testing hourly support at 75.40. The next level below here is a daily low at 74.60.

EUR/JPY: Major support point close by

Sean Lee — Mon, 23 Aug 2010 21:58:31 +0000

The market is again nearing 107.30, which was the spike low from June. A clean break below there will turn the focus onto the major psychological support at 100, which is also a major support from 2001.

AUD/JPY to be the focus on Tokyo open

Sean Lee — Sun, 22 Aug 2010 20:25:46 +0000

Japanese investors tend to be long AUD/JPY and the question now is whether the hung parliament here in Australia is likely to frighten them out of their carry-trades. As can be seen on the attached daily chart, the pair is in a medium term consolidation between 73.25/78.75 and we are close to the middle of this range at the moment.

Major levels to watch in EUR/USD and Cable

Sean Lee — Fri, 20 Aug 2010 08:43:11 +0000

EUR/USD has significant technical support at 1.2735 and I suspect that there will be a lot of stop-loss sell orders parked just below there
Cable has seen a lot of buying by Sovereign names around the 200-day MA which is at 1.5481 today. Once again we can expect to see lots of stop-loss sell orders below this level.

What have the technicals told us this week

Sean Lee — Thu, 19 Aug 2010 20:48:11 +0000

EUR/USD is consolidating in a 200-pip range between 1.2735/1.2935. It looks like an inverted flag or pennant which would suggest to me that strong support at 1.2735 will eventually break and we get further downside
EUR/GBP has posted a double-top on the hourly chart at .8282 with a neckline at yesterday’s high just below .8250
Cable: Similar to the EUR/USD, it is in a consolidation pattern supported by the 200-day MA and a break below 1.5490 should see the short-term downtrend resume
AUD/USD respected a short-term 61.8% retracement level at .9080 which says to me that it’s in a short-term downtrend.
EUR/JPY: Still in the middle of its 108/114 medium term range and the technical picture has not become any clearer this week
USD/JPY: Still in a solid downtrend and no clear signs of any basing formation emerging

EUR/GBP technicals: Double-top on hourly chart suggests more downside

Sean Lee — Thu, 19 Aug 2010 08:46:37 +0000

I’m sure lots of you have been watching the EUR/GBP hourly chart which topped out twice at .8282 and has now turned lower. The neckline is at .8247 which has been the high today. Selling rallies for a re-test of .8165 looks like a sensible short-term strategy.

EUR/USD: Technical support holds beautifully

Sean Lee — Mon, 16 Aug 2010 07:12:13 +0000

The technical support levels I outlined earlier this morning at 1.2735/40 held beautifully and buying dips will now be the technicians trade of choice. At least you know where to put the stop!

EUR/USD technicals: Support at 1.2735/40

Sean Lee — Sun, 15 Aug 2010 22:33:26 +0000

Trendline support comes in around 1.2730 (depending on how accurately you can draw your lines!), the 50% retracement level is at 1.2740 (1.2150/1.3330) and there is a previous daily low at 1.2735.

Talk Kampo on the bid in EUR/JPY

Gerry Davies — Thu, 12 Aug 2010 13:10:50 +0000

Down at 109.20/25. A source also tells me this is notable technical support.

We’re presently at 109.50.

EUR/USD: Technical support levels around 1.2735/40

Sean Lee — Thu, 12 Aug 2010 10:24:49 +0000

The trendline drawn from 1.1875 through 1.2150 comes in around 1.2740
The 50% retracement of 1.2150/1.3330 is at 1.2740
The daily low from July 21st is at 1.2735

Cable: Next support around 1.5600

Sean Lee — Wed, 11 Aug 2010 09:51:07 +0000

A consolidation band on the move higher between 1.5550/1.5650 should provide the next technical support level for the cable. Talk of lightish bids from an Asian central bank at 1.5580, 1.5590 and 1.5600 which will also help stem the bleeding if we get that far.

ForexLive N.American Wrap: Busy day, but no huge change

Gerry Davies — Tue, 10 Aug 2010 19:54:49 +0000

Federal Reserve leaves rates on hold. Announces QE lite
Canadian July housing starts 189.2k, down from revised 192.3k in June
US Q2 non-farm productivity -0.9% vs Q1 +3.9%, worse than median forecast of +0.2%. Negative for first time since Q4 2008. Biggest decline since Q3 2008
US Q2 non-farm unit labor costs +0.2% vs Q1 -3.7%, below median forecast of +1.3%
Canada June new housing prices +0.1% from previous +0.3% and versus median forecast of +0.2%
US chain store sales rise 1.2% in August to date vs July. Rise 3% in week ended Aug 7 vs year ago
IBD/TIPP economic optimism index falls to 43.6 in August vs 44.7 in July, weaker than median forecast of 45.5 and lowest since October 2008
US June wholesale inventories +0.1% vs +0.5% in May and lower than median forecast of +0.4%
Greece Jan-July budget deficit narrows 39.7% y/y vs target of 39.5%

Busy day, but at the end of it all there’s not a huge amount of change in the majors.

EUR/USD at 1.3190 from early 1.3165. Inbetween the pairing came under fairly intense pressure as general risk aversion picked up. Stops tripped through 1.3100 on way to session low 1.3075. Much talk of buy orders lying in wait at 1.3050/70 and that helped recovery.

We sat just above 1.3100 as FOMC announced the results of its’ deliberations. News of QE lite undermined the dollar and we got above 1.3200 in double quick time. China then stepped in and sold above 1.3210 and that really was pretty much that.

Talk of decent sell orders out of Asia lying in wait up at 1.3250.

Cable up at 1.5855 from early 1.5755. At once stage cable got as low as 1.5712, but talk of decent buy orders at 1.5700/10 lent support. The pairing will have to survive event risk double whammy tomorrow in form of BOE quarterly inflation report/King press conference and JUne jobs report.

USD/JPY down at 85.30 from early 85.90. In between got as high as 86.24. BIS sold above 86.20 and then large US automaker sold decent amounts helping send the pairing back under 86.00.

The announcement of QE lite by the Fed hit the pairing as US yields came lower. We reached session low of 85.19 before marginal recovery. Defence of 85.00 barrier interest still alive and kicking so it would seem.

USD/CAD rallied early. Started around 1.0330 and got as high as 1.0388. However a large US custodial was seen very notable seller around the highs and that was that. Then the same US automaker who sold USD/JPY turned up and clumped USD/CAD and we finish down at 1.0320. Obviously the Fed’s QE lite weighed on the pairing as well.

EUR/JPY technicals: Buying dips to 111.80 favoured strategy

Sean Lee — Tue, 10 Aug 2010 07:48:50 +0000

The 61.8% retracement of the 110/114.70 move comes in at 111.80 which is also approximately where two previous lows reside. The trendline drawn off the 107.30 low comes in at approximately the same level. Certainly worth watching for the technical traders out there.

ForexLive N.American Wrap: USD bears trim positions ahead of Fed

Gerry Davies — Mon, 09 Aug 2010 19:33:54 +0000

San Francisco Fed says new recession a “significant possibility” in next two years, though unlikely in next few months
Russia’s Putin: No reason to expect speedy lifting of grain export ban
Ukraine central bank cuts key discount rate to 7.75% from 8.5%
U.S. conference board employment trends index rises to 97.0 in July from 96.7 in June
Mexico consumer prices +0.22% in July vs median forecast of +0.25%

Greenback made ground across the board today as the USD bears trimmed their positions ahead of tomorrows’ FOMC meet.

It was pretty tedious fare to be honest with USD/CHF offering the most excitment.

EUR/USD down at 1.3220 from early 1.3260, but trendline support at 1.3210 remains intact as we head into the close. Talk of buy orders at 1.3210/15, stops below 1.3200.

On topside talk of “large” sell orders up at 1.3325/35 ahead of 1.3350 barrier option interest.

Cable down at 1.5900 from early 1.5970 with stops tripped through 1.5920. We’ve been as low as 1.5895. Market will have some focus past tomorrows’ Fed decision on Wednesdays BOE quarterly inflation report and June jobs report. Both represent event risks for sterling.

EUR/GBP up at .8320 from early .8300.

USD/JPY up at 85.85 from early 85.60, underpinned by slightly better US yields. However so far sell orders at 85.80/00 have proved durable upside barrier.

USD/CHF up at 1.0480 from early 1.0395 with model funds seen good buyers of this pairing today. There was some scuttlebutt that the pairing was being impacted by M&A flows, but not sure the talk rang true.