Yes I am talking my position but I continue to believe that the AUD is significantly undervalued against all the other majors, but especially against the Europeans. Australia is spending savings rather than printing new paper, its’ economy is winning the international ugly contest and it is backed by massive reserves of hard commodities. Not derivatives and hot air, but useful stuff which can be dug up!
On a more short term and slightly more objective note:
- USD/JPY is in a medium term 92-102 consolidation phase and we are right back in the middle. As long as the JPY crosses remain bid, USD/JPY will inch higher.
- EUR/USD is in a short term bull phase, but if you weren’t bullish at 1.26, then don’t get bullish at 1.36. I expect to see some noise now inside a 1.31/1.39 range.
- EUR/JPY is back in vogue but I am unconvinced. As we wrote some weeks ago, EUR/JPY was a good buy at 117. Now it’s at 132 and I think the topside will struggle to get above 135/140. I’m waiting for an exhaustive rally to go short again.
- USD/CHF: very solid technical support at 1.1170 is still holding. I am long and will remain so whilst this level holds.
- Sterling- too hard.
Good luck today.