The Weekly Update: The Japanese Yen and Euro Aussie

USDJPY and EURAUD

As a new government formed in Italy the risk for snap elections has diminished. The safe haven flows that were seen in JPY pairs and crossed eased as a result, which weakened JPY against a basket of currencies. UK data on Friday kicked GBP higher against a basket of currencies.

President Donald Trump imposed new tariffs on imported steel and aluminium, the market reaction has been limited so far at the time of this writing.

USDJPY Signal Strategy

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The Weekly Update: The Japanese Yen and Euro Aussie

USDJPY Daily Chart 03/06/18

USDJPY daily chart painted top H&S on the daily chart. We were aware the price was hovering near the neckline prior to the formation of the top H&S, which is why we anticipated a scenario where GBPJPY may kick higher. We will soon discover where USDJPY potential weakness may be due to a firm JPY or a weak USD.

We are not entirely keen on increasing our exposure to JPY at the time of this writing, we will have to decide after the opening of the Forex market.

EURAUD Signal Strategy

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The Weekly Update: The Japanese Yen and Euro Aussie

EURAUD Weekly Chart 03/06/18

We have been tracking EURAUD for some time. The recent dip may be sufficient to initiate a long trade in the cross. We were holding a short position in AUDNZD, we should mention that the retracement on Friday (in AUDNZD) was weaker than we have anticipated. Australia’s retail sales are due in Asia and may provide the initial gains in EURAUD.

We have also been monitoring NZD pairs and crosses. NZDCAD was the only cross we may have able to enter but due to the recovery off the lows on Friday we cannot enter the market without some risks. EURNZD weekly close was still insufficient to initiate a short trade. ECB President Mario Draghi’s speech as well as Canada’s employment figures are the key events this week.

EURAUD Trade Alert

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The Weekly Update: The Japanese Yen and Euro Aussie

EURAUD Weekly Chart II 03/06/18

EURAUD long at market price (ask 1.5419)
Take profit: 15810
Protective stop: 1.5230
Risk Ratio (RR): 1: 2.1 (approx.)
Estimated duration: 21 days

Relevant as long as EURAUD is below 1.5460

Note; The potential drawdown is a re-test of 1.5350.

07/06/18 UPDATE: EURAUD is trading at 1.5476 at the time of this writing, we are closing 10% of the long trade at market price.

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The Weekly Update: The Japanese Yen and Euro Aussie

EURAUD Weekly Chart 07/06/18

The partial closure is intended to reduce the holding costs of the long trade.

10/06/18 UPDATE: The main risk in EURAUD is a re-test of 1.5250 (which may or may not materialize before correcting higher). The risk emerged due to the lower shadow of the weekly session.

From a technical angle we are unconvinced EUR is due to correct higher on Thursday at the time of this writing, we decided to close EURAUD long trade at market price (1.5503).

The screenshot from 10/06/18 was deleted by error, we should say that EURAUD maintained its uptrend, reaching over 1.5700.


AS THE OBJECTIVE OF THE STRATEGIES HAS BEEN MET THE ANALYSIS IS NOW ACCESSIBLE TO ALL TRADERS


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The Weekly Update: The Japanese Yen and Euro Aussie

The Weekly Update: The Japanese Yen and Euro Aussie