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
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
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.
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
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 USD saw a sharp reversal higher despite a 50bp cut, simply because the markets were positioned for a more dovish dot plot. I have argued in prior analysis the USD exposure is a bit stretched over the near-term, so perhaps shorting the USD is getting a bit stale. We also have several key markets at inflection points after a risk event. Matt Simpson takes a...
Matt takes another look at Bitcoin futures to update his analysis from last week, which seems to be playing nicely with his view that it is trying to carve out a swing low on the daily chart and muster up the strength for a rally.
An influx of short bets against WTI crude oil futures is behind the recent leg lower for oil prices. But having already fallen nearly 14% over eight days, bears may want to tread carefully with a fresh catalyst. Matt Simpson takes a look at the weekly, daily and 4-hour chart alongside large speculative positioning.
Looking at Bitcoin futures and how real-money accounts are positioned, a larger move higher could be brewing. But first, a nice setup could also be forming on the daily chart for a cheeky swing higher, if nothing else.
Metals were all lower on Tuesday as investors braced for a hard-landing scenario. But not all metals fell equally. We take a look at gold, silver and copper to sort the longs from the shorts, depending on which variant of an economic landing we could be facing.
It is good to finally see the USD strength we were calling for finally come into play. It may have a little further to run, which could see further downside on the weekly chart for EUR/USD. But first, we look at a potential long on the daily and 4-hour chart, taking the weekly analysis into account.
On one hand, seasonality for the S&P 500 and indices in general tends to be unfavourable in September. On the other, asset managers are 'all in' being long the index which sits just beneath its record high. We weigh up the competing factors to decide whether we should tread carefully around seasonality, or simply ignore it.
MS
Picking inflection points is not for everyone. But taking into account the two months of heavy USD selling, disapproval of a 'strong yen' from the BOJ and arguably oversold USD/JPY, perhaps some bullish mean reversion is due.
We take a look at the monthly, daily and 4-hour charts to show key levels.
We stand back to admire the long-term chart of the US dollar index, and yes there could be further downside over the coming weeks. But a quick check on the daily timeframe makes us wary of jumping into an already well-established short, given potential support levels nearby and the fact everyone and their dogs seem to be bearish the dollar.
