Wednesday's risk-on session played nicely for AUD/JPY bulls thanks to a broadly weaker yen. We're eyeing a continuation towards 103, although an initial pullback may be preferred depending on which timeframe we look at.
MS
Implied volatility has spiked for FX majors ahead of the US election, and it really could go either way for AUD/USD depending on who wins the race to the Whitehouse. But how much downside is left for the Aussie when taking market positioning, China data and the latest RBA statement into account?
MS
Election jitters are in the air, and it is weighing on Wall Street sentiment - and dragging the ASX 200 with it, which also faces pressure from a spate of weak China figures in recent weeks.
A potential head and shoulders top has formed on the daily chart, and prices are close to testing a support zone which could double up as a neckline.
For now, the ASX...
I wanted to see how major markets have performed in the days before, during and after US elections. So I coded up a new spreadsheet. Here are the results...
Please note:
- Price data supplied by Refinitiv
- Most markets go back 8 elections
- US futures and VIX are the exception, which go back 6 elections
MS
Today I take a look at some recent ideas to see how they played out, then reassess them on the live charts to see if they're still worth keeping an eye on. Charts include AUD/USD, AUD/JPY, SPI 200 and WTI.
MS
After just one day of retracing on Friday, the USD bull regained momentum on Monday thanks to Fed members continuing to push back on aggressive easing. Markets are also pricing in a Trump win with some polls suggesting he is ahead in three key states and some bookies even touting for him to win. In the current climate, USD/JPY could be at 152 before we know it.
MS
USD/CHF has performed well since its latest rebound from 0.84, a level some analysts suspect prompts the SNB to intervene when prices cross beneath it. but unlike USD/JPY, its rally hasn't stalled near a big round number such as 150 or look overextended.
The daily RSI (14) is confirming the rally and not in the overbought zone. The USD-CHF 2-year spread has...
Another strong employment report for Australia helped the Aussie dollar gain traction on Thursday. And with Wall Street stocks remaining supported amid a weak-yen environment, AUD/JPY could be nearing a bullish breakout.
AUD/JPY found support at the 200-day SMA on Wednesday and formed a bullish engulfing candle on Thursday. The 2-year AU-JP yield differential...
WTI has fallen over 11% in seven days, and the loss of momentum around $70 could appeal to bullish swing traders. We're not looking for anything heroic here given the mixed signals on futures positioning, but it might be able to deliver a cheeky bounce higher over the near term.
MS.
The ASX 200 futures chart reached a record high on Wednesday, and momentarily traded above 8400. Yet repeatedly we see the market hold above this level (also note the weekly R3 pivot is within the area).
A bearish divergence is forming on the 1-hour chart, so the bias is for a false break of the highs and retracement lower ahead of its next sustained record...
Bears are retaining control on AUD/USD after they used the 50-day EMA as a nice entry for fresh shorts. Yet support was found around a historical weekly VPOC (volume point of control), so perhaps a minor bounce could be due. Bears could seek to fade into any such bounce around resistance level such as the swing lows around 67c, in anticipation of a move down to...
It is no coincidence that VIX futures have been creeping higher in recent weeks despite Wall Street hitting record highs, as traders are presumably hedging downside risk as we approach the US election. And that means it may not take much to spook traders out of bullish bets with markets at frothy levels, and that could see the yen strengthen as a safety play. Matt...
The Dow and S&P 500 extended their record highs on Monday, and the Nasdaq futures looks eager to jump out the gate during Asian trade and close the gap. And with asset managers increasing bullish bets on the tech-focused market, perhaps it can make a record high of its own.
MS
The euro has already seen a decent selloff heading into Thursday's ECB meeting, where expectations for them to cut by 25bp are high. And that runs the risk that that the cut is already priced in, and could leave the euro susceptible to a bounce if a dovish tone (hint of further cuts) are not also delivered.
Prices are trying to hold around the 1.09, near the...
We finally saw the USD rebound I was beating the drum about back in September. But now it's hit a decent resistance zone, I weigh up its potential to hold its ground or producer a deeper pullback. Markets covered include the USD index, EUR/USD and gold.
MS.
The recovery from 140 has been nothing short of impressive. The daily RSI is confirming the rising prices on the daily chart, and momentum suggests USD/JPY wants to head for the 200-day MA around the 151 handle.
There are some concerns that that inflation could pick up due to the hot NFP report, so we may find that pre-emptive bets prompt a break of the August...
A combination of factors saw crude oil snap its 5-day winning streak on Tuesday. China's equity markets plunged at double-digit levels when traders realised no new stimulus from China was to be unveiled after golden weak. US production forecasts were lowered by the EIA and concerns over the Middle East receded somewhat.
An elongated bearish engulfing / outside...
A bullish trend has developed on the daily chart. Prices have pulled back lower, yet support was found at the 50 retracement level and the cross now trades back above the 200-day MA.
A bullish divergence has formed on the 4-hout chart, and price action appears to be corrective on this timeframe. Also note that the 2-year spread between GB-CH yields ahead of...
