Currency Updates:
The AUD/USD had a reasonably quiet day on Friday, trading in a tight 60 pip range. Commodity markets had an eventful day with copper falling heavily on inventory reports out of China and Gold prices staying volatile around a mid-price of $1325. There is nothing of major importance on today’s economic calendar so we will again depend on positional adjustments for a lead. USD/JPY was the big mover on Friday, as longs pared their positions ahead of the traditional August holidays, so look there for intraday trade opportunities.
TECHNICALS: The short-term charts are starting to look moderately constructive, trying to form support levels now near .9230 (see chart). The resistance levels are quite clear at .9330/40 but a clean break above there would open the way for a test of medium-term technical resistance levels closer to .9600.
CROSSES: AUD/JPY pulled back lower towards mid-range levels near 91.00 on the back of a stronger Yen across the board but further range consolidation 90.00/93.50 is favoured (see chart). AUD/NZD is still consolidating below 1.1500 but I favour some broad range trading roughly between 1.14/1.16 for the next few days. EUR/AUD has again failed to convincingly trade above its important pivot at 1.4400 and I favour a test lower here in coming weeks, though still staying in consolidation mode 1.39/1.45.
ORDERS & FLOWS: The main event to watch for on the order books will be heavy stop-loss buy orders above .9350. It may take a few sessions to get there but they are reportedly quite large and will likely prove magnetic. Intraday bids are already reported near .9225/35 with some stops also below .9210.
INTRADAY CONCLUSION: Buy dips. I’m still of the opinion that we will sooner or later get a sharp short-covering spike higher. Support on the day is at .9225/35 so buy near there with a stop below .9200. Bears can look to sell any spikes towards .9330/35, also with tight stops above .9350.
TRADE OF THE DAY: Again, same as on Friday. Be brave and buy AUD/USD! As I mentioned above, you will need to pick the right entry levels but I think a short-squeeze is coming. If you want plenty of intraday trade opportunities then look to USD/JPY as it should be volatile.
