The market may well be winding down fast for the holiday periods around Christmas and the New Year but the spectre of stop-losses on order boards doesn’t ever seem to take a break. The main interest would seem to be in cable, with heavy stops (mainly option-related) now reported above 1.6315 and 1.6325. AUD/USD is the other pair where stops abound, with downside orders seen below 1.0450.
EUR/USD has bounced back to mid-range levels after plenty of oscillation yesterday between 1.3200/80 (see chart). EUR/JPY was responsible for most of the volatility and the comments attributed to the Greek FinMin were responsible for the first sell-off during Asian trade. If a short-term top can form near 1.3300, then we could see a dip towards the first Fibo at 1.3140 but with the medium-term outlook now looking moderately bullish, buying-big-dips seems like an obvious strategy.
Cable is attracting quite a bit of interest at the moment with the market eyeing a line of 3 highs across 1.6310 (see chart). Selling interest is reportedly still solid but the magnetic effect of option-related stops above 1.6315 and 1.6325 may prove too strong.
AUD/USD is another pair with plenty of stop-loss orders, this time on the downside, and all this stop-loss chat certainly makes a case for considering a GBP/AUD trade? The previous high in AUD/USD at 1.0510 should prove to be strong initial resistance and even if the downside stops are triggered, I’d expect the channel base at 1.0400/10 to provide solid support (see chart).
USD/JPY is back trading at 84.40 again, after a brief blip below 84.00 yesterday post-BOJ. There seems to be little point in messing with the bull trend but with Yen shorts in the professional market still reported at extreme 6-year highs, going long is also not without its dangers. I’m in watch-and-wait mode here, waiting for a clear opportunity.
The same applies to the Yen crosses and if the markets open on January 7th with pairs like EUR/JPY still at these levels, then we could be in for some sharp early-2013 bull moves. But again, best to wait and see what develops.
That’s it from me for 2012, good luck for the New Year and TGIF!