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Afternoon Technicals (all charts)
Traders are buzzing about the surprise 50 bps cut by the RBA (market expected 25). The immediate AUD reaction was sharp but the AUDUSD remains confined to a 10225-10475 range. From a trading standpoint, the advent of a new month is just as important as the 50 bps cut. Using early month ranges as points of reference from which to establish trades is a method that I’ve taught in seminars for years. Opening monthly range breakout strategies are shown below for the EURUSD and AUDUSD. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
The strategy on AUDUSD has worked so well in recent years that it may be due for a drawdown. Keep that in mind. The EURUSD is in a range that I want no part of. The Yen crosses, specifically the USDJPY and CADJPY, have my attention. Think North America vs. Japan, Hockey (it is the playoffs) against Sumo wrestling.
Prepared by Jamie Saettele, CMT
Prepared by Jamie Saettele, CMT
USDJPY – Barring a full retracement of the post ISM surge, the USDJPY is going to carve out a daily key reversal on the first day of the month in front of MAJOR support (October intervention high at 7953). This is the kind of setup I dream about.
USDCAD – The bounce off of 9800 offers the opportunity to get short for the larger breakdown. Combine the USDCAD and USDJPY and you get a super bullish CADJPY.
To contact Jamie e-mail jsaettele@dailyfx.com. Follow me on Twitter @JamieSaettele
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Jamie is the author of Sentiment in the Forex Market.
