Currency Updates:
It was an excellent day for the AUD/USD bears, with the post-jobs data rally giving excellent intraday selling opportunities. The NY session was extremely USD-bullish, with rumours, decent economic data and comments from the Fed all conspiring to send the USD through the roof. USD/JPY was the big mover, taking out an important physical and psychological barrier at 100.00 and the Yen crosses should be busy today.
The RBA monetary policy statement will be released this afternoon.
TECHNICALS: Support levels on the daily chart are breaking down and further losses look very likely (see chart). Volatility is also picking up so we can expect wide intraday ranges. Patience is still required but I suggest a .9970/1.0220 range over coming days with a marked bearish bias. Initial intraday resistance starts at previous lows near 1.0115 and support at the overnight lows just above 1.0050.
CROSSES: It was all about the USD overnight but we still need to watch important levels in the crosses. AUD/NZD is likely to consolidate in a 1.1950/1.2150 range and EUR/AUD is building a constructive bullish case and is now targeting 1.3100.
AUD/JPY is likely to be the most volatile today (see chart) and we need to watch the top of the consolidative wedge pattern near 102.00.
ORDERS & FLOWS: No sign of any Sovereign buyers in the AUD/USD overnight but dealers still expect them to show some interest on any big dips towards 1.0000. Most of the big orders were cleared out in yesterday’s volatility.
INTRADAY CONCLUSION: I’m staying bearish on the AUD/USD but we need to be much more careful now with entry levels as we could easily see 100 pip spikes. With USD/JPY now above 100.00, we could see a spike in the Yen crosses and that could help rally the AUD/USD at any time. Sell big rallies in AUD/USD is still the play.
TRADE OF THE DAY: Yesterday’s AUD/USD shorts survived, only just, but today we stick with the obvious; buy USD/JPY dips towards 100.00 with stops below 99.50 looking for 101+.
