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By: Joel Kruger
Drats - A frustrating bout of trade for me over the past 24 hours. Equity markets have run a little further than I would have expected and this in turn kept my Kiwi short from moving in the right direction. The short position actually performed quite reasonably considering, with the trade only marginally out of the money into the New York close. But a scorching series of China trade data sent the market back over 0.8350 and I decided to step aside. I have been in and out of this short trade over the past several weeks with overall success and will continue to look for fresh opportunities to sell.
Sooner Than Later - Moving on, despite some bids in USD/JPY on Tuesday, this market is still quite a bit more reserved than equities and has not shared the same enthusiasm. I think this is an important point, and I still expect to see USD/JPY roll back over in favor of fresh weakness towards 100.00. Ultimately, only above 103.50 would negate. For today, the key level I will be watching is S&P 1827. This level represents the 78.6% fib retrace off of the record high to recent low move, and should finally stall the current rally. If and when we get there, I will be looking for some form of a catalyst to once again trigger a fresh bout of risk off trade and broad reversal.
Sooner Than Later - Moving on, despite some bids in USD/JPY on Tuesday, this market is still quite a bit more reserved than equities and has not shared the same enthusiasm. I think this is an important point, and I still expect to see USD/JPY roll back over in favor of fresh weakness towards 100.00. Ultimately, only above 103.50 would negate. For today, the key level I will be watching is S&P 1827. This level represents the 78.6% fib retrace off of the record high to recent low move, and should finally stall the current rally. If and when we get there, I will be looking for some form of a catalyst to once again trigger a fresh bout of risk off trade and broad reversal.
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