Our stance is pretty much the same for mid-term to long-term, we will think AUD, NZD, USD & JPY are strong currencies to buy and GBP is the weakest currency to sell.
Right now the sentiment is really favouring JPY and EUR, AUD & NZD are also good and USD is really up and down depended on the data and comments, while GBP is having a uptrend momentum now but we expected it to die down very soon.
CAD is a great short-term currency to buy but really have to keep an eye on OPEC comment and WTI.
We’re in favour of buying JPY, EUR, AUD, NZD, CAD
and selling GBP
We took a small scalping position of EUR/GBP today in the positive news of GBP which we thought we could get in with good level, however, the GBP has continued to be longer than our expectation and we got stopped out with a loss of 0.2%.
Our current swing trade of SHROT
GBP/JPY + GBP/AUD are both in play, and both are a bit drawdown as expected. Because of the daily trade nature and large stop loss, we’re not too worry about it but we also do not want to sell GBP anymore as that will give us too much risk and exposure in one single currency.
So far we have total of 3% into shorting GBP.
So that will leave us to perhaps sell USD as the sentiment can be negative from time to time, however, because FOMC minute is coming out tomorrow, we don’t want to get into any USD trade for now.
So really we don’t have any eligible trade based on our current exposures and fundamental & sentimental analysis for now.
Let’s take a look at technical chart.
All the GBP pair have great buying signals and no surprise as GBP had a better than expected data today.
However, we’re not convicted to buy GBP especially not in a mid-term swing trade, so not a consideration for us.
The only other pair that is eligible is AUD/JPY as we have a bearish big shadow and as mentioned, JPY is one of the strongest currency for now due to negative sentiment, meanwhile, AUD has been talked down by RBA governor, and also the negative sentiment will help JPY to keep going if the sentiment keeps gong.
However, we’re not convicted enough to SHORT AUD as we think the current downtrend is merely a sentiment play and very soon AUD will regain it’s strength, of course JPY is still a very strong currency but we don’t want to sell AUD.
So really there is no trade for us to take for today and we will continue monitor our GBP/JPY + GBP/AUD short trade.
Current strength based on futures market is in AUD, JPY, USD, CAD
and weakness is in GBP & EUR
NZD & CHF remain neutral.
- Today we had a better than expected CPI data from GBP that has helped it to surge against other currencies. Fundamentally GBP is still a very bearish currency, however, it has already been hugely sold all these time and any positive data could and had helped the retrace to go large. The better than expected CPI was not really a surprise because we know that GBP has been hugely depreciated ever since Brexit, and that has made many imported products to be expensive, which in terms transferred the costs to the consumers and hence, we had a higher than expiated CPI. It was already noted by economist that if the GBP continues to be weaken, then UK might reach their target inflation of 2% earlier than expected and then the BOE will have no chance but to raise interest rate. However, this sort of exchange rate inflation is not really a strong sign for the economy and in the long run, UK will still have to rely on EURO zone and see how the whole exit procedure goes with EURO. Nevertheless, we are probably going to see some large retrace continues in GBP for this week.
- USD on the other hand is the weakest currency for today due to the worse than expected Core CPI data and negative CPI data. As mentioned, USD is really a wait and see currency because fundamentally it is bullish, however, the FED has not made any hike movement and market has expressed its disappointment by selling USD. Today 2 FED members came out and stated the same statement that the economy is recovering well, employment is almost full and September hike is “possible” and hike for 2016 is almost certain…etc, nothing really new and the future market has priced in 20% probability of rate hike for now.
- NZD has a great GDT data and great employment and PPI datas, overall it’s really doing well after the rate cut and as mentioned, it is still an attractive currency especially for its highest yield among all other major currencies.
- AUD on the other hand had no significant data but was talked down by RBA governor, as next month is his last term and he has stated the same concern for overvalued AUD which will hurt the exporting economy, the housing debt worries..etc. He also stated that housing market is not a risk category now, which is very similar to NZD’s stance on it, and that means they both have rooms for more rate cut if necessary. Although market has already anticipated a further rate cut in AUD and NZD sometime in the future, this talk has apparently some effect on AUD and we saw some weakness in it.
- JPY is the strongest currency for today and this week so far, nothing fundamentally has changed for Japan, but the sentiment has turned off and hot money has flowed into safe heaven currencies again including CHF & EUR as well.
- CAD continued to be well supported due to surge in WTI, now we’re above $45 and climbing up, aiming to test the significant level of $50 and if breaks and stands above, we shall see more strength into CAD for the coming future.
Our stance is pretty much the same for mid-term to long-term, we will think AUD, NZD, USD & JPY are strong currencies to buy and GBP is the weakest currency to sell.
Right now the sentiment is really favouring JPY and EUR, AUD & NZD are also good and USD is really up and down depended on the data and comments, while GBP is having a uptrend momentum now but we expected it to die down very soon.
CAD is a great short-term currency to buy but really have to keep an eye on OPEC comment and WTI.
We’re in favour of buying JPY, EUR, AUD, NZD, CAD
and selling GBP
We took a small scalping position of EUR/GBP today in the positive news of GBP which we thought we could get in with good level, however, the GBP has continued to be longer than our expectation and we got stopped out with a loss of 0.2%.
Our current swing trade of SHROT
GBP/JPY + GBP/AUD are both in play, and both are a bit drawdown as expected. Because of the daily trade nature and large stop loss, we’re not too worry about it but we also do not want to sell GBP anymore as that will give us too much risk and exposure in one single currency.
So far we have total of 3% into shorting GBP.
So that will leave us to perhaps sell USD as the sentiment can be negative from time to time, however, because FOMC minute is coming out tomorrow, we don’t want to get into any USD trade for now.
So really we don’t have any eligible trade based on our current exposures and fundamental & sentimental analysis for now.
Let’s take a look at technical chart.
All the GBP pair have great buying signals and no surprise as GBP had a better than expected data today.
However, we’re not convicted to buy GBP especially not in a mid-term swing trade, so not a consideration for us.
The only other pair that is eligible is AUD/JPY as we have a bearish big shadow and as mentioned, JPY is one of the strongest currency for now due to negative sentiment, meanwhile, AUD has been talked down by RBA governor, and also the negative sentiment will help JPY to keep going if the sentiment keeps gong.
However, we’re not convicted enough to SHORT AUD as we think the current downtrend is merely a sentiment play and very soon AUD will regain it’s strength, of course JPY is still a very strong currency but we don’t want to sell AUD.
So really there is no trade for us to take for today and we will continue monitor our GBP/JPY + GBP/AUD short trade.
Current strength based on futures market is in AUD, JPY, USD, CAD
and weakness is in GBP & EUR
NZD & CHF remain neutral.