Submitted by Nic Lenoir of ICAP
We have been preaching short positions in EURUSD and AUDUSD as part of our long USD trading outlook. Our view has been reinforced by the break through the 50-DMA in EURUSD and DXY as wehave well documented already. Accordingly, Stocks have retraced following their brief highs post NFP last Friday. While on the bigger picture we remain bearish for risk markets as daily divergence is absolutely massive in S&P, Dax Futures, or AUDUSD which is a great risk proxy as well, in the shorter run, as highlighted on the attached charts, there is 30-min and 60-min bullish divergence and here is a possibility the initial bearish impulse is complete. We would recommend taking some chips of the table here and sell EURUSD on a re-test of the 50-dma at 1.4878, which we have corresponding to the 0.9178/0.92 zone in AUDUSD. In AUDUSD the 0.8950 is the big level to break to accelerate towards our medium term initial target of 0.8270.
As for S&P futures are concerned, I will update with our target zone to sell it on this rally.
Good luck trading,