Trade Ideas: EUR/USD, USD/JPY, EUR/CHF, GBP/USD, AUD/USD, NZD/USD - UBS
The following are UBS' latest short-term (mostly intraday) trading strategies for EUR/USD, USD/JPY, EUR/CHF, GBP/USD, AUD/USD, and NZD/USD.
EUR/USD: doesn't really have a life of its own at the moment and most flows seem to be euro-cross related. The broader 1.07-1.10 range for EURUSD remains intact, so continue to play intraday moves.
USD/JPY: The bounce for risk was short-lived and equities are under heavy pressure, while oil is back below $30/bbl. This has put pressure on USDJPY and yen crosses. The probability of further easing from the BoJ this week is low and we prefer playing the pair from the short side, selling closer to 118.30, with a stop above 118.90. Downside Fibonacci levels from last week's squeeze are 117.77, 117.43 and 117.08.
EUR/CHF: traded through 1.10 yesterday, and although it failed to push higher, the cross still seems bid. We may see a slow grind higher to test the important resistance level around 1.1050. Flows have been relatively light. Try and buy 20-30 pip dips and stay long if the cross remains above 1.0950/60.
GBP/USD: Flows have been very quiet so far this week, with a slight bias to buy after all the selling since the beginning of the year. We think a break to the topside is more likely, but the pair is trading well within its recent range. We prefer buying on dips, with a stop below 1.4150.
AUD/USD: Buying on dips in risk has not really worked out, with oil selling off over the past 24 hours and AUDUSD coming under renewed pressure. Markets remain highly correlated with price action in crude and equities look very fragile again, with the Shanghai Composite Index falling by more than 6% today. Stay flexible in this whippy market; the pivot for AUDUSD on the downside is 0.6825, while 0.7100 is the key level on the topside.
NZD/USD: has been dragged lower by the risk selloff and the momentum that was building over the past three sessions has been lost. Watch 0.6350 and 0.6225 on the downside, while 0.6610 is the pivot up top.
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