Euro

This is an oft-used headline and it’s true yet again; the FX market is sitting and waiting for yet another meeting on the Greek debt tranche to end. My sense is that a favourable outcome is partially priced in but that no matter what the outcome, we should see some movement. Another delay will see the EUR bears re-enter the market in force. An agreement on when the funding is to be released will see stops above 1.3005 in EUR/USD triggered. Don’t guess what’s going to happen, wait for the volatility and decide on your trading strategy then.

The announcement that BOC Governor Carney will move to the Bank of England caused a slight sell-off in the CAD but that was quickly unwound as the market decided to do nothing.

EUR/USD is still in medium-term range-trading mode; overall sentiment is bearish and as today’s CFTC data showed (shorts increased by 10% up to last Tuesday) the market is always willing to pile into short positions. The cataclysmic news which the market then hopes for never seems to materialise and subsequently we get a period of short-covering. Short-term charts (see chart) look moderately constructive and if stops get triggered above 1.3005, then technical resistance at 1.3020 will come under extreme pressure. Buying-dips favoured in my opinion.

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EUR/JPY is still seriously over-bought on most technical indicators but it’s not really showing any signs of an imminent collapse. CFTC data showed Yen shorts at 6 month highs but they still have a way to go before they get to extreme levels. Trailing stops reported now below 106.00 and they might get targeted depending on the EZ/IMF meeting outcome.

USD/JPY is still showing solid bullish tendencies (rally-consolidate-rally-consolidate) (see chart) and with talk of macro funds and Sovereigns on the bid near 81.50, buying dips is still my preference here.

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The AUD/USD is completely range-bound with speculators quite happy to sell rallies towards 1.0500/20 and reserve managers buying on 100/150 pip dips. Looks like more of the same until the RBA next week.

GBP, CAD and NZD are all similarly range-bound and primed for the next move.

Good luck today.