11 Oct 2013
Session Recap: “Risk-on” trade persists with Asia-Pacific risk currencies leading the way higher
FXstreet.com (Barcelona) - The Final Asian trading session of the week has brought traders a continuation of the overall risk-bullish tone that has dominated the global markets over the last 36 hours.
What's driving this rally goes beyond the headlines
Two forces seem to be driving the action right now. The first is the transition from “risk-off” to “risk-on” – which has taken a temporarily bearish EUR/JPY chart only a few days ago to being a breakout / bullish chart currently. The same can be said for the other global proxy for risk in currencies – the AUD/JPY.
The other key macro driver appears to be the unwinding of the “American Armageddon” trade that had really started to take hold earlier in the week. The mechanics of that trade were to sell US equities and sell the greenback and own international / emerging markets equities and buy a basket of international currencies. During the Asian session, we have seen the DXY continue to rally along with US equity futures and Asian equity markets (the latter due to “risk on” being the attitude of traders).
Equity markets in Asia are performing as follows as of 04:35 GMT:
• Nikkei 225 +1.56%
• Hang Seng +1.25%
• Straits Times +0.50%
• Shanghai Comp. +0.88%
• All Ordinaries +1.49%
• BSE 30 +0.80%
• Jakarta Composite +0.57%
• KLSE Composite +0.53%
• Seoul Composite +1.27%
• Taiwan Weighted +0.45%
Top headlines in the Asian session:
AUD/CAD short-term overbought but 0.9942 target acting as a magnet
GBP/AUD violates immediate support reaching 1.6858 session lows
GBP/USD held support at 1.5907 the last two sessions; Elliott Wavers say 1.6432 is upside target
GBP/JPY aims for hat trick? Weekly peaks at 157.30 aiming higher
EUR/USD grinding sideways after rally; now sporting descending triangle with 1.3527 resistance
AUD/JPY breaches 93 zone momentarily
RBA ahead of the curve vs Fed? What it means for AUD/USD?
USD/JPY rips higher Thursday on flight from the Yen safety trade
Obama refuses to accept short-term debt limit proposal
AUD/NZD head and shoulders bearish?
DXY rallies past resistance at 80.44 – DXY not a “safety” asset right now
EUR/JPY, bullish momentum points towards 133.20 and beyond...
What's driving this rally goes beyond the headlines
Two forces seem to be driving the action right now. The first is the transition from “risk-off” to “risk-on” – which has taken a temporarily bearish EUR/JPY chart only a few days ago to being a breakout / bullish chart currently. The same can be said for the other global proxy for risk in currencies – the AUD/JPY.
The other key macro driver appears to be the unwinding of the “American Armageddon” trade that had really started to take hold earlier in the week. The mechanics of that trade were to sell US equities and sell the greenback and own international / emerging markets equities and buy a basket of international currencies. During the Asian session, we have seen the DXY continue to rally along with US equity futures and Asian equity markets (the latter due to “risk on” being the attitude of traders).
Equity markets in Asia are performing as follows as of 04:35 GMT:
• Nikkei 225 +1.56%
• Hang Seng +1.25%
• Straits Times +0.50%
• Shanghai Comp. +0.88%
• All Ordinaries +1.49%
• BSE 30 +0.80%
• Jakarta Composite +0.57%
• KLSE Composite +0.53%
• Seoul Composite +1.27%
• Taiwan Weighted +0.45%
Top headlines in the Asian session:
AUD/CAD short-term overbought but 0.9942 target acting as a magnet
GBP/AUD violates immediate support reaching 1.6858 session lows
GBP/USD held support at 1.5907 the last two sessions; Elliott Wavers say 1.6432 is upside target
GBP/JPY aims for hat trick? Weekly peaks at 157.30 aiming higher
EUR/USD grinding sideways after rally; now sporting descending triangle with 1.3527 resistance
AUD/JPY breaches 93 zone momentarily
RBA ahead of the curve vs Fed? What it means for AUD/USD?
USD/JPY rips higher Thursday on flight from the Yen safety trade
Obama refuses to accept short-term debt limit proposal
AUD/NZD head and shoulders bearish?
DXY rallies past resistance at 80.44 – DXY not a “safety” asset right now
EUR/JPY, bullish momentum points towards 133.20 and beyond...