Cable holds at one-week highs as buyers show poise to keep the upside momentum going

GBP/USD holds above 1.2150 as the pound is firmer on the day

GBP/USD H1 16-08

The pair is now trading at fresh one-week highs after briefly touching 1.2161 in the past hour and is continuing to hold above 1.2150 for the time being.

Buyers have accomplished quite a bit in the session so far today, having broken back above the 200-hour MA (blue line), the trendline resistance and the 23.6 retracement level.

All of that points to a more bullish near-term bias and if buyers can keep price above those levels, there is every possibility for price to extend higher still in the short-term.

I firmly believe that the Brexit focus is taking a breather right now as we aren't making much headway considering that lawmakers are on their summer break. But I would expect those sensitivities and risks to be heightened again next month as we hash out the odds of UK MPs working to stop Boris Johnson from pursuing a no-deal Brexit.

As such, I would still expect the pound to be pressured once that comes back into focus but in the mean time, you can't argue with the technical levels and I'm also looking at EUR/GBP as another reason for the pound's outperformance:

EUR/GBP H1 16-08

The continued track lower towards 0.9100 suggests that the pound is still holding up well and until we see more of a turnaround there, I wouldn't pick at going short against the quid just yet ahead of September - though I would still be searching for rallies to sell into until something changes on the Brexit front.



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EUR/USD falls to fresh two-week low below 1.1100

EUR/USD falls to 1.1087, the lowest level since 2 August

EUR/USD H1 16-08

It's not a massive move by any means but we are seeing the dollar firm across the board as EUR/USD slips back below 1.1100 to a fresh two-week low.

The greenback is also seen advancing against franc, aussie and kiwi with also a slight nudge higher in USD/JPY to 106.20 currently.

For EUR/USD, the next key area to watch out for is the swing region around 1.1070-80. If that gives way, expect sellers to find less resistance in driving the pair lower towards 1.1000.

As for the outlook ahead of the next week, you can check out my earlier post here.



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AUD/JPY near-term price range continues to narrow, what's next?

The pair is sitting in a near-term wedge at the moment

AUD/JPY H1 16-08

If you measure back to last week, price action has been sitting in only a 200 pips range between 71.00 and 73.00 for the most part. That comes despite the spike we saw in the yen at the start of European trading yesterday.

Of note, the movement this week is starting to build into a narrowing wedge for price action centering around the key hourly moving averages.

As such, a near-term breakout should follow soon and I reckon the next key trade will be to go with any solid break as such. That said, any breakout will be more convincing if it is accompanied by fundamentals to back it up.

For now, the risk mood remains the key factor influencing markets so I'd look towards that to provide traders with any added conviction in search for a solid breakout.

Otherwise, we may just end up being stuck back in range again between the lows around 71.00 (and possibly nearer to the January flash crash low) and the highs closer to the 38.2 retracement level and 73.00 until markets can figure out a firm direction.



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USD/JPY at the lows for the day as risk-off mood deepens

It's been a wild ride for USD/JPY in trading today

USD/JPY H1 15-08

The pair is at the day's lows now trading just barely above 105.70 with price testing the 100-hour MA (red line) once again. That is the key near-term level to watch as sellers have been struggling to crack that level since overnight trading.

The yen was sent for a wild ride today as the currency fell sharply at the start of European trading amid a recovery in risk sentiment. The quick jump from 105.90 to 106.78 stalled at the 38.2 retracement level before settling lower around 106.20-30.

But after China issued a statement on trade/tariffs, the yen gained as Treasuries pushed higher with yields and equities both sinking. Right now, US 10-year yields are down at the lows for the day by over 6 bps to 1.515%.

The next key risk event later today is the release of US economic data as highlighted here. Let's see how that plays out and how it will affect the risk mood as markets continue their shift to a new market paradigm that centers on the global economic slowdown.



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Yet another quick run higher in USD/JPY

USD/JPY moves up to 106.34 from 105.80 levels

USD/JPY H1 15-08

I'm not seeing any solid reason for the jump higher here as Treasury yields stay pressured but US futures are paring back earlier losses to near flat levels now so perhaps that is feeding into the move we're seeing here.

Besides that, there's a stray comment by China's foreign ministry that it hopes for US to meet them halfway in trade talks but that isn't anything new. If anything, this looks like an algo move that went wrong.

E-minis actually spiked to highs before retreating slightly now to +0.3%. I reckon this is surely an algo move that has gone awry because what China said isn't anything new in my view.



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Cable touches 1.2100 again after better UK retail sales data, will this time be different?

GBP/USD runs into key near-term resistance at 1.2100 again

GBP/USD H1 15-08

It feels like a case of déjà vu for cable as day-after-day this week we've seen decent UK data to help propel the pound higher towards 1.2100 against the dollar, only for it to fizzle after.

Right now, price is back up to test the figure level again with the 200-hour MA (blue line) also lurking nearby at 1.2109. These will be the two key levels to watch out for in terms of any potential upside break in the pair.

Quite frankly, I don't see much reason for the pound to climb significantly higher (besides short covering perhaps) considering that the data this week pretty much does nothing to change the BOE outlook amid prevailing Brexit uncertainty.

I'd be more inclined to risk shorts here considering the pattern this week but if we do see a technical break higher this week, it will make for more attractive opportunities ahead of renewed Brexit focus in September.



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AUDUSD moves to new week low

Gains from yesterday are reversed today

As the open to the US stock market looms, the AUDUSD is extending the trading range for the week, breaking below the lows from Monday and Tuesday's trading at the 0.6744-47 area.  We currently traded 0.6738.  Those lows were also home to swing lows going back to August 5 and August 8.  On August 7 (the day the RBNZ cut rates by 50 bps), the pair raced to the lowest low since March 2009, but recovered and created a new higher floor. That floor is now broken.  

Gains from yesterday are reversed today

When a floor is broken, it becomes a ceiling.  Traders will now look for the 0.67472 to attract sellers.  Where do we go?  As long as the ceiling holds (no momentum above), the path of least resistance is to the downside with:

 

  • 0.6732 the 61.8% retracement 

  • 0.67215 a swing low frow August 7

  • 0.67000 the natural support level, and  

  • 0.66767, the lowest low since March 2009 as targets.



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USDJPY down but stalling near moving averages

100 hour MA stalling the fall (for now)

Up one day. Down the the next. 

100 hour MA stalling the fall (for now)

The USDJPY has retraced 61.8% of the move higher yesterday as "risk off" yesterday is "risk on" today.


Technically, the price moved lower early and corrected to the 106.63 to 106.674 but could not get above.   From there, buyers started to lose some of their mojo, and the price moved lower. The recent price action lower was shoved from the sharp moves in the yield curve (negative 2-10) and the acceleration of the stock price declines.  

The pair has stalled the fall between the 100 hour moving average at 105.799, and the 200 hour moving average at 106.033. The low reached 105.771 - just below the  100 hour MA.   So there is some apprehension at the moving averages, but sellers remain in control intraday.



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AUD/JPY extends decline as risk-off mood gains traction on US yield curve inversion

AUD/JPY is the big mover in the major currencies space again today

AUD/JPY H1 14-08

But this time it is on the receiving end of a beating as price is down by 1.2% and is threatening to break below key near-term levels. Of note, price is falling below the 100 and 200-hour moving averages (red and blue lines respectively).

As such, this would put sellers back in control and threaten a move towards 71.00 and last week's low of 70.75 once again. At this point, sellers may start looking towards revisiting the January flash crash low over the next few sessions.

Can Trump come and save the day again later on?



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EUR/USD moves off the lows as price continues to pivot around the 1.1200 handle

EUR/USD moves back up to 1.1215

EUR/USD H1 13-08

But it's still the same old story for EUR/USD over the past week. Price is continuing to consolidate and pivot around 1.1200 with little conviction to firmly break away on either side of the figure level.

Of note, the lows today come as price tests the broken trendline support just above 1.1180 before climbing back up to move above the 100-hour MA (red line) now but price is still sitting below the topside trendline resistance @ 1.1217.

For a moment yesterday, it looked like we may get a directional break in the pair but sellers failed to extend the downside move below the 38.2 retracement level @ 1.1165 and the 200-hour MA (blue line).

Despite the move higher in the past half-hour, it's still hardly convincing of any firm directional move for EUR/USD until we see price break below both key hourly moving averages or if price holds a firm daily close above the 100-day moving average @ 1.1224.



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