EUR Trading Outlook (26-03-2013)

CROSSES: EUR/AUD stalled near 1.2500 (see chart) and fell very heavily from there. The obvious technical target is 1.2160 and I’d much prefer to be short this pair although being long AUD in a risk-averse environment is not without its risks. AUD/JPY (see chart) continues to trade inside of its recent channel between 97.20/100.00 but a clean break below could well set off some very sharp stop-loss selling.

ORDERS & FLOWS: There was heavy EUR/AUD selling overnight with two separate reports of around 1 billion AUD equivalent by big European banks on behalf of their customers. Heavy offers were also seen in AUD/USD at 1.0475/80 and it looks like the big hedge funds are still looking to sell at this level, like they did a few weeks ago. These flows (one AUD positive, the other negative) look to have netted each other out.