Expect quiet trading until Friday

2.50 gmt

I think the yen pairs will not move much until the BoJ press report tomorrow around this time. If anything, participants, especially the short-term speculative type, will get a bit nervous and may be exiting the UJ and EJ trades, leading these pairs lower. The technical picture argues for one more tilt lower at below 92 in UJ. If that level breaks decisively we could go a further 100 pips lower. That is the reason I’ve put the not removed the hedges.

There is a cycle to sentiment, in individuals and in the market. This sentiment against the USDJPY will need to go through this cycle, and the charts will show when the sentiment changes. At the moment it still has a few sessions / days to play out.

The AUDUSD sentiment has definitely changed. The charts point to it. After grinding lower for many days, but unable to make a big break below, I think the chances are that we will see 1.0450 and maybe 1.05 in a few days.

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5 thoughts on “Expect quiet trading until Friday

  1. ExpatWatcher

    Zen … nice catch on the AUD, however I do not share your bullishness. 1.0350 has capped a couple of times now and above that is the 1.0380 pivot point. We are also hovering around the 200 day ma. I think the AUD was swept higher with the EUR – but soon EURAUD will start to influence the AUUS again. I don’t think sentiment has turned that quickly for the AUD … more likely the heavy shorting to get to as low as 1.0230 (a fibo retrace) led to a short squeeze/stop hunt. The EURAUD has a >1.40 target I feel and while this will largely manifest itself via a higher EUUS – the AUD will suffer

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    1. ZenFXTrader

      Hi Expat,
      It takes all kinds of minds to make a market! 😉
      I am first and foremost a technical trader. The fundamental story changes depending on what the market has done. Therefore I always go with my technical signals ahead of Fundamentals. Often I find myself disagreeing with my own technical signals due to my understanding of fundamentals. But after a few sessions/days, when key levels have been breached, the fundamentals seem to align with the technicals. The charts have an eerie way of anticipating the market (in the very short term at least). And in case I am wrong, the chart signals usually allow me to get out with a small loss or sometimes a few pips profit. Only when a market reverses violently do I suffer the full extent of my stop loss.
      I am not really sure where the AUDUSD will go to, but on current patterns if we clear 1.0380 I’d say we’ll see 1.0450 at least.

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      1. ZenFXTrader

        Expat – The AUDUSD is about to close above the 200hr MA which is around 1.0343. Barring a sudden reversal, that close makes it likely that this pair will go up in the European session to test 1.0370 Fibo and Trendline. If we get an hourly close above 1.0375, we’re very likely to see 1.0450 next.

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  2. ExpatWatcher

    I agree. Not what I want, but it is shaping up to squeeze the shorts further. The cross I find quite compelling at the moment is the AUDNZD …. directionally it has seemed to me that NZUS is a bit of an early indicator for the AUUS. Mind – I could well be getting caught in the headlights of watching crosses too much. GL

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    1. ZenFXTrader

      I think you should review the thinking behind your earlier conviction – that AUD is headed down. It seems to be playing out correctly. After a small profit on the long side, I have also turned short in AUDUSD, although the movements are excruciatingly slow.
      I don’t like trading minor pairs, as the liquidity is poor and the pair is subject to movements in the major pairs that make up the cross. So just deal in the major pairs, why bother with the minor crosses at all. At least that’s my philosophy.

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