Currency Updates:
The AUD/USD remains unchanged after choppy overnight trade which was mainly highlighted by positional adjustment, and the major market trends remain unchanged.
I’m not expecting much volatility today in Asia; Japanese GDP is usually ignored by the market and whilst both the RBA foreign transaction report and Chinese FDI are of general interest, they are unlikely to move the market.
TECHNICALS: The weekly trendline support near .9870 which we looked at yesterday is still supporting the AUD/USD and should be respected. Short-term resistance starts at .9920 (see chart) but the bulls will need to regain 1.0000 in order to start reversing the strong bearish momentum.
CROSSES: AUD/NZD has pulled back toward the lower end of its 1.20/1.2150 consolidation range and if this pair can fall and consolidate below 1.1950 then the dominant bear trend may be able to reassert itself.
AUD/JPY is another cross pair which is in consolidation mode between 100.50 and 102.00 and will need to break out of this in order to increase short-term momentum.
EUR/AUD ran into a bout of profit taking near 1.3100 and has pulled back 100 pips.
ORDERS & FLOWS: Very solid bids in the AUD/USD at .9850 are yet to be tested properly and there are stop-loss sell orders reported below .9840. Sell orders were seen overnight at .9920 with tight trailing stops also reported above .9935/40. Stop-loss buy orders are still being reported above 102.00 in AUD/JPY.
INTRADAY CONCLUSION: Looks like we should get some range trading today between .9870/.9920 and only a break outside of a .9850/.9940 range will add momentum in either direction. Best to stick with the bearish bias until proven wrong although I did cover some of my AUD short exposure overnight as it’s starting to feel oversold.
TRADE OF THE DAY: AUD/JPY looks to me as if it might have stop-loss spike in it and risk-reward suggests that being long near 101.00 with a stop-loss below 100.40 targeting 103.00 makes good trading sense.
