Yesterday Trade review

Euro

Euro broke the 1.3331 resistance level and ran up above 1.3415. Due to this, I didn’t enter any Euro trades and was waiting for a retracement which didn’t quite happen.

GBP

Sterling didn’t manage to reach 1.5727 yesterday and was pretty much ranging around 1.5646 Fibonacci levels of 50%. I didn’t get any trades on the sterling either, so let’s see if anything works out today.

Aussie

I didn’t get a chance to get into a long position in the Aussie, as it never quite reached 0.9500 levels. It did breach close to 0.9600 but bounced off quickly. It seems like 0.9600 is holding up as a strong resistance.

Tokyo and Hongkong out

So not much action last night apart from the Euro smashing above 1.3400!

Japanese PM Kan comments that intervention is “unavoidable” so looks like there is fear of an intervention. Will keep a close watch, considering Tokyo and Hong Kong are on a break today so looks like Asian session is going to be quiet until Europe comes in.

Euro on the other hand broke 1.3340 levels all the way up to 1.3400. Portugal had a good debt auction yesterday but yields still seem to be widening, so fundamentally Europe still has some sovereign issues to consider. But the Euro looks to be ignoring this at the moment, which I find a little worrisome as Euro could change directions at any point. So I’m a little uncomfortable buying at these high levels. I may just wait it out here until I see that change in direction, or a retracement.

Aussie traded higher last night to 0.9601 on option expires, but came down to a low of 0.9508. I think it’s going to be quiet on this front too during the Asian session.

Data Today:

-         US Initial jobless claims – 12.30pm GMT

-         US leading indicators – 2pm GMT

-         US existing home sales – 2pm GMT

Trade ideas

Euro

Resistance level of 1.3161 has been broken so I would look at this level now a support. The next resistance is around 1.3331 level which was just below the high of August 6^th.

I would watch this level and see whether it breaks or not.

If it doesn’t I’d look to sell here at 1.3330.

GBP

The daily Fibonacci level of 50% at 1.5646 has been broken. The next resistance level is the 61.8% Fibonacci level at 1.5727. On the support side the first support to watch for is at the 38.2% Fibonacci level at 1.5565. As this has been broken I would watch this level. The stronger support is at 1.5504 which is around yesterday’s low.

I would look to sell at 1.5727 if it doesn’t break.

Aussie

Upward trend is still intact so I would only look at starting my position with a buy. The resistance level of 0.9500 has been broken so I would look at this as a support level. If 0.9500 holds, I would look to buy here.

JPY

I’m still going to keep quiet here, until I figure out which direction yen is going in.

Trade Review

Unfortunately I did not get any trades in, as I was a little worried about what would happen at the FOMC.

Euro never did quite reach 1.3035 levels last night but on the other hand it did break the 1.3161 levels. Several stop losses were triggered above 1.3200 levels. It looks like a new strategy has to be placed on the Euro as it has broken the range.

Sterling on the other hand did manage to push down to 1.5538 and below. At that point of time though, cable looked extremely bearish, so I decided to not buy at that level. Looks like a missed trade, as I would be in profit at the moment. The level of 1.5675 still holds, but I’m going to watch that level and see if it gets broken, as sterling looks bullish.

The Aussie never reached 0.9328 levels and instead broke the resistance level of 0.9489. I didn’t get a trade in here either; I guess I’ll have to pull up a new strategy here to.

Down went the dollar

Wow down went the USD and up went everything else!!

 So the FOMC statement came out yesterday: 

“the committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.”

Seems like there are still issues the US needs to face.

We saw the yen strengthen down to a low of 84.84, and seems like Minister Kan could possible intervene again in the markets. But don’t think it’s going to happen before his meeting with Obama. So be cautious on the yen.

Euro took out stops all the way up to 1.3285 this morning Asian time. The next strong resistance looks to be 1.3334 which was the high on August 6^th.

Data Today

Australia Westpac leading indicators

Eurozone industrial new orders – 9am GMT

Eurozone consumer confidence – 2pm GMT

US house price index – 2pm GMT

Intra-day Trade Ideas

Euro

The 1 hour chart shows a strong resistance at 1.3161 and a strong support at 1.3033.

I would play this range by selling at 1.3160 and buying at 1.3035.

GBP

The 1 hour chart shows a strong resistance at 1.5727, which is also the daily chart Fibonacci level 61.8. Before that, 1.5677 seems to be holding up and on the downside 1.5536 looks like a strong support. I would start with a sell position as sterling seems a little weaker.

I would look to sell at 1.5675 and buy at 1.5538.

Aussie

The Aussie has a strong uptrend on the 4 hour chart, so I would look to start my position with a buy. There seems to be a strong resistance at 0.9489 and a strong support at 0.9328.

I would look to buy Aussie at 0.9330.

USDJPY, I’m a little cautious of, as it’s not moving much and there is still fear of BOJ intervening again. I’d rather keep quiet on this pair until I see a clear direction.

Waiting for FOMC

Very quiet market yesterday. Japan was closed yesterday and seems like everyone is anticipating the FOMC before they enter into a new trade.

Dollar yen was extremely quiet because of the holiday in Japan.

Portugal and Irish spreads have been widening, so we saw Euro come off a little.

Sterling traded weaker with some M&A selling happening. UK times report also stated “Mortgage lending shrank to its weakest August level for a decade last month, triggering fresh predictions that house prices are heading downward this autumn.”  We may just see sterling head lower if prices remain low.

Aussie – RBA September minutes suggest that “likely higher rates will be needed at some point to contain inflation.” Looks like we’ll be seeing Aussie race higher.

Data today

RBA board September minutes – 1.30am GMT

UK public sector net borrowing – 8.30am GMT

US housing start – 12.30pm GMT

US FOMC rate decision – 6.15pm GMT