With most of the major pairings hardly moving in 30 pip ranges it is unusual to see EUR/GBP moving around but that is what it has done in Asia today. It opened at .9090, traded down to .9070 before moving higher again to .9100 at present. A quick look at the daily charts shows a fairly bullish set-up which is consolidating inside a .9050/.9150 range. More range trading looks likely though it is hard to argue against the recent up-trend. More information needed.

Looks like we might be close to a good buying level for AUD/JPY. AUD/USD dipped down below .9120 after the RBA minutes but the stay down there was short-lived and we are now back at the .9140 opening level. USD/JPY also tried to break lower and trigger stops below 90.15 but the bids there are seemingly quite solid.

The AUD/JPY daily chart tells a slightly different story. Any close today below 83.25 would suggest to me that a short term top is in place and that we should see a gradual move lower towards 81.00.

The market knew what was coming but nevertheless insisted on buying the NZD in the two days leading up to the meeting. Governor Bollard said he’s in no hurry to raise rates, no surprise there, and the NZD/USD falls 100 pips and is hanging around it’s lows. NZD/USD could easily fall another 100 before it meets any type of meaningful technical support, a moderately bullish trend channel with parameters now at .6865 and .7105. Edges please.

As you are probably well aware, I’m bullish and long the AUD/USD, but I expect to see some drawn-out bullish consolidation before a major move higher can commence.

The daily chart has support/resistance now at .9005 (20-day MA) and .9325, recent congestive chart highs. The 100-day MA sits at .9060 and watch out for a bullish cross of the 20-day/100-day MAs which is likely to happen early next week. This is often a trigger for medium-term systematic trading models to enter the market.

Hourly support is initially at last nighs low around .9130 (also a previous high) and below there the bullish hourly trendline around .9100. Resistance of course is at last nights .9190 high.

The close above the 100-day MA and the rising 20-day MA are both good signs for AUD/USD bulls. Nevertheless there is still the possibility of a topping formation emerging and really it will take a clean break above .9400 to confirm the latest bull trend. Initial support levels are at .9060 and .8970. Resistance points are quite scarce until .9320.

The rounding top or bottom is a favourite of many of the old-timers in the market and it looks like we may be seeing one form on the EUR/USD daily chart. The actual base at 1.3450 is very close to the important 61.8% support and this adds strength to the bullish analysis. Initial support levels are at 1.3570 and 1.3530. Resistance points are 1.3735, 1.3790, 1.3840 and 1.3870.

This market overshot on the downside when it fell from 1.54 to 1.48 in a few short days. There are two ways of viewing such a sell-off, a final capitulation at the end of a move or an indication that the down side is the weak side and that more losses are likely. I’m in the latter camp for now.

Support is clear now at 1.4800 and at 1.4950/1.5000 on a more short term timeframe. Initial resistance is at 1.5180 (38.2% of 1.5820/1.4785) but the preferred entry level for me is at 1.5425, which is the 61.8% retracement and the broad bearish trend line. This is also close to the 1.55 breakdown level.

These are wide ranges, as is usual in cable, and patience will be required. Trading the edges of 1.4950/1.5180 in the short term and similarly, 1.4800/1.5425 in the medium term, is my suggestion.

Friday’s close at .9082 was the first close above the 100-day MA in 6 weeks and although far from convincing, it is certainly another bullish factor to go along with the strong up-trend. There’s not much in the way of significant resistance on the daily chart until .9330 and support is now more clearly defined at .8935 which is both an intraday low and the 20-day MA. I’m looking to play the edges of this range with a bullish bias (I have been running a long position for almost a week).

I have the daily trendline from 134 through 125 coming in around 122.50 which is also approximately where the 50% retracement of 125.23/119.65 is. This might well be the most important technical level to watch today.

Early last week I wrote about a very successful macro trader who has a proprietary technical trading model. He anticipates USD/JPY falling towards 75 in the coming months. His GBP/JPY analysis was even more bearish, in fact it seemed so outlandish that I don’t think I even mentioned it. Perhaps I shouldn’t have been so quick to judge. 

However we may argue with the fundamental outlook, there are still some very credible people in the market who can see big moves happening and we should take their views/analysis into account when taking our trading decisions.

On the day, I prefer the sell-rally strategy and I consider any levels towards 89.80 to be decent entry points.

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