- The market sentiment has turned up since last European sessions all the way until now, regardless of the upcoming Brexit. This means market has really digested the event and this unlikely is going to create a drastic downside movement in financial market like last year 2016 when UK first voted to leave EU. The sentiment alone is going to help the high yield currencies and pressures the safe heaven currencies. We like AUD because it had been largely sold since last week due to risk off sentiment and commodity price declined. Now prices have picking up well, and we also had another news from the future interest rate and possible rate hike for RBA. The main issue with RBA is the overheating housing market and that means no more rate cut and a possible rate hike is necessary to tighten the market. Meanwhile, Japanese is still in the deflatinoary market and no sign of removing the current QQE.
- Regardless of the fundamental bias, the catalyst for this trade is simply the sentiment which can shift anytime, so this is just a low conviction trade that we might get out if the sentiment shifts. We also still have the possibility that UK article 50 might crates another round of risk off sentiment for Japanese yen to go higher. We’re most likely going to trade this in intraday base and shorter timeframe.
- The existing sentiment for the market is a risk on now.
- The game plan is to buy AUD/JPY at good retracement level and ride it up with trailing sl. I will also do an early exit if the equities turn red and/or if we have a shift in risk appetite.
- The risk is a sudden shift in risk appetite which could happen considering we do have article 50 event for the day.
- Yes but only if we have a good retracment level.
R2 & 4H/Daily S/R @ 85.5 - 85.60
R1 & 4H/Daily S/R @ 85.12-85.25
100 EMA & 4H/Daily S/R @ 84.75-84.85
PP & 4H/Daily S/R @ 84.50
Weekly S/R @ 84.40
S1 & 4H/Daily S/R @ 84-84.10
we got in with 5 mins chart at 85 with whole number at 50-60% fib zone and aiming for 100% at 85.13 or higher, SL at 78% at 84.92.
This is a much more low conviction trade as we don’t really have strong level at 85 but 85 is a psychological level.
the european equity just turned red with STXE 600, still a mix picture and we’re holding the trade for now to see.