Good morning,
I’m back! And this time I’m feeling better than I have done in over a week (many thanks to illness and general bad luck).
I start off with fresh eyes today as I feel that I haven’t really seen the market in over a week and now will most likely need the better part of today to get reacquainted with it all.
No news to anyone that the EURUSD still sits languishing in its own Greek tragedy, nor is it in any way enlightening to learn that the Fed has moved the discount rate higher by 25bps late last week.
Interestingly though spec positions in the IMM stakes are now at record shorts for the EUR and of course record longs for the USD across the board. Where does that leave us? In simple terms we’re open to ugly squeezes and cleanouts in the coming days. In the absence of any hard data in the next day or two moves are likely to be pretty ugly if and when they finally start moving and as a result I look for relative value trades and firmly on the radar is the AUDNZD once more.
Further afield in the remaining majors the Greenback continues to rule the path of least resistance and as such we’re seeing the USDJPY pushing into first (and when there most likely overdone) resistance at 92.50/80, with intermediate support now resting at 91.30 and lower into 90.80. I buy tentatively into support as mentioned and look for a push into 92.00. Once we’re conclusively on the topside though I will be a strong seller in the next week or 10 days.
In the AUDUSD, surprisingly I am bullish in the very near term and still look for 0.9170 to be test in the coming days as the risk euphoria slowly returns to the market. From there however, like with the USDJPY above I will be a firm seller or better still look to express the view via the AUDNZD (which I’ll be sending an additional strategy piece in the next day or so).
The Cable is also now USD driven and I look for 1.5580/90 to hold the upside for the time being and provide small opportunities for being sold into.
I will keep you posted and myself desperately look forward to getting a better eye on this market.
Best regards,
Ken Veksler.
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