Look Who's Back

IN AGAIN - We wait and we wait and we wait and then we are rewarded for the patience. When I say 'we are rewarded,' I can't speak about any reward from profit that might come from the trade, but I can speak about the reward that comes from maintaining discipline with the trading and making sure to only be taking a position if it's there for the taking. As per today's technical update, the long AUDNZD position that we have reestablished, has dropped back into strong internal resistance over the past few years and rising trend-line support off the cycle low from 2015 that stalled out just shy of parity. As a reminder, AUDNZD is trading down at levels that show undervaluation based on the longer term behavior, with room for a critical base and a resurgence in demand over the coming months that should take this rate well back above a recent peak in the form of the 2017 high around 1.1300. This makes the risk-reward highly compelling down here.

cartoon apr 5

STOCKS AND WAGES - The only other position we have on at the moment is the Cable short, with this market not really going anywhere just yet. But all signs pointing to another healthy drop to allow for the major pair to test rising bull channel support from 2017 before heading higher again. For this to happen, I think we need to see the Euro break down from its sideways chop that has been most of 2018 price action. The level to keep an eye on there is 1.2155, with a break below to fuel a more pronounced US Dollar rally that should then open more declines in the Pound. I think a lot of what happens for the remainder of this week will come down to what happens in the world of equities and what happens with this Friday's US jobs report, with that hourly earnings component capable of sending a message of rising inflation and the need for the Fed to be thinking more aggressively about policy normalization, something that would be supportive of the Buck.

2018 has been quiet on the trading front but we are in a couple of positions right now.

The Case Against the US Dollar

Here's a look at the broader market price action in the US Dollar pairs and w...


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EURCHF Short in Play

We've taken a short position on the EURCHF cross after highlighting this poss...