Trade Ideas

South Africa: Daily FX Technical Strategy – Breakouts

USD/ZAR, EUR/ZAR and GBP/ZAR broke out of their recent ranges to nullify the Doji patterns we highlighted yesterday.

EUR/USD – Channel/symmetry target align today at 1.3342

Price action this morning is dampening the effects of yesterday’s shooting star reversal.

FX Ringside

Buy EUR/SEK downside through 4 months Risk Reversal 8.65 Eur put (1x) vs 8.9050 Eur call (1.5x)

FX Trends daily (FOCUS: NZD/CAD)

NZD/CAD The cross has resumed its downtrend after a technical rebound last week and should test a support at 0.8110 (short term support line).

Long EUR/JPY@103.80. Stop at 103.00. Take profit 105.30 US stocks showed a key reversal pattern last Friday ( Bullish Hammer) on the back of falling concern of a fiscal cliff thanks to a comment (BOEHNER SAYS MEETING WITH PRESIDENT WAS CONSTRUCTIVE, OUTLINED A FRAMEWORK FOR TAXES, SPENDING).

FX Trends daily (FOCUS : GBP/AUD)

GBP/AUD The cross has sharply bounced in the recent weeks and has tested (and slightly breached) yesterday a resistance at 1.5623 before a consolidation.

FX Trends daily (FOCUS : AUD/CAD)

AUD/CAD After a consolidation in the recent sessions, the cross held above a support at 1,0414 (support line linkink May & July 2012 low pivots). This support now stands at 1,0427 and above this level, a return to the recent high at 1,0519 is exopected.

Taking profit on short EUR/AUD trade idea

* We are taking profit on our trade recommendation of being short EUR/AUD via options, initiated on 29 June 2012 at a cost of 41bp and a net gain of 90bp.

Short EUR/AUD – Positioning for further downside

Improving global risk sentiment and widening Australia-eurozone interest rate differentials will likely place further downward pressure on EUR/AUD, in our view.

Technical Analysis – FX Daily Majors

Today’s highlights: · USDJPY: Small “Double Top” through 83.01 favours defensive consolidation with risk down to 81.96 (which we look to hold), before next leg higher (to 85.54).

FX Focus: AUD outlook – Two sides of the same coin

* We recently lowered our AUD/USD forecast path (Emerging Markets Quarterly: Repositioning, not playing defence, 20 March 2012) and now expect AUD/USD to trade in a 1.04-1.07 range over the next 12 months. This is consistent with our technical strategists’ expectation of AUD/USD remaining in a 1.01-1.10 range over the next 6-8 months.

Technical Analysis – FX Daily Majors

Today’s highlights: · EURUSD: Near-term down trend reversal reinforced by probe above initial 1.3192 recovery target. A less negative tone, but only above 1.3292 shifts to a more positive bias