Intraday Thoughts

Hello Everyone

I always find monday's difficult I am sure all of you do too, regardless of the leads that come from friday's trading session, it always seem like the slate gets wiped clean at the start of the new week. And so it is that this week started in asia with a burst to the downside following the lead that wall street provided. I always keep my powder dry first thing monday, its better to watch and see where it goes, take audjpy for example today so far its been down and back 100 pips, who could really get a read on that in both directions, if you can your better than me that's for sure.

This week as of right now, I remain bullish for risk at this point in time, wall street equities have gone down quite a lot in the later half of last week as have European markets. The reason I mention the equity markets is in the last couple of weeks they have set the tone in the FX market and in low liquidity August I don't see this trend changing for now.

The Aussie dollar to me looks cheap that's right CHEAP, you heard correctly, especially when lined up against the yen, last week COT data indicated that there are a truck load of buyers in Aussie, when audjpy reached 76.00 today the bounce from this level was significant given the time of day (during Asia), there was some monster bids waiting for it at that level, and while risk is being bought in the other markets I expect the Aussie to benefit.

NZDJPY also looks pretty attractive down at these levels and a rise here could have more to do with support for buying of risk like the Aussie and selling of yen, as fundamentals for NZ are at best average with higher unemployment numbers recently as one example, this pair looks a good bet for a small long if you use the technicals to get you a good entry where you can cover with a small stop, in case it goes bad.

As a mentioned in my last post the yield on the US 2yr note in my view will help decide where the bottom is for USDJPY, and so far 0.50 has held fairly well, usdjpy has rallied some 100 pips since I wrote that piece and everyday its holds significantly above 85, is a nail in the coffin for UJ bears. To short UJ from here to me feels like shorting at the bottom so if I am thinking that then I suppose its reasonable to believe other traders may be thinking the same.

That's what I see today, good luck.