Goldman Sachs' Current Open Tactical Trades In FX, Rates, & Equities

14 AUG 2013 01:56 EDT

By eFXnews.com

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The following is the list of Goldman Sachs' current open tactical trades in FX, rates, and equities as of August 14, 2013:
On FX:
Stay long EUR/GBP, opened at 0.8462 on 8 May 2013, with an initial target of 0.88 and a stop on a close below 0.8350.
Stay short GBP/NOK, opened at 9.20 on 28 June 2013, with an initial target of 8.60 and a stop on a close above 9.46.
On Rates:
Stay long 10-year Italian government bonds (BTPs) vs short 10-year French government bonds (OATs), recommended on Sunday 28 April 2013 and initiated on Monday 29 April 2013 at a spread of 221bp, with an initial target of 180bp and a stop on a close above 260bp.
Stay long Dec-14 Australian Bank Bill Futures, opened at 97.11 on 29 Jul 2013, with a target of 97.60 and a stop on a close below 97.11.
On Equities:
Go long Wavefront GDP Growth Basket, opened on 13 August 2013, with an initial target of 86bp and a stop on a close below 77 >>>
More on the GS' new equities trade: "We are initiating a tactical recommendation to be long the Wavefront GDP Growth basket, an equity portfolio that pits the most cyclically exposed industries in the US market against the least cyclically exposed industries and that, as a result, has outsized leverage to the global business cycle. With the S&P 500 index close to highs, and growth expected to accelerate to trend and above over the next several quarters, sector leadership could continue its march from the most defensive parts of the market earlier this year, to more domestic facing cyclicals currently, and to a broader set of cyclicals going forward. Our initial target is set at 86, with a stop on a close below 77. Of course, we are initiating this new tactical trade after a very robust set of July PMI readings last month, which makes the scope for disappointment on the data side a bit higher and so we have set a rather tight stop accordingly. However, markets have not progressed much since then, and our view is that the broad trajectory of activity indicators remains higher from here."

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Morgan Stanley Holds EUR/USD Short & A limit Order To Sell Cable

13 AUG 2013 13:50 EDT

By eFXnews.com

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Morgan Stanley maintains a macro tactical short EUR/USD trade from 1.3300 with a stop at 1.3440, and a target at 1.2700.
"We expect EUR to weaken over coming months as the market increasingly prices in German political developments. First, polls suggest Germany will maintain its current CDU/FDP government rather than a more EMU-friendly grand coalition. Second, the upcoming Constitutional Court decision could undermine the effectiveness of OMT. And despite better leading indicators, credit growth remains tepid," MS says as a rationale behind this call.
Along with that, MS also shares the consensus view that there is a strong bullish environment for the USD over the medium term on the potential of the Fed QE tapering.
Meanwhile MS has an active limit order to sell GBP/USD at 1.5570 with a stop at 1.5750 and a target at 1.4100.
"We believe that the market has misinterpreted the Bank of England’s forward guidance and now look to reestablish short GBP positions. The 7% unemployment threshold implies that rates will remain unchanged until 3Q16. This should further depress real rates, which are already well into negative territory. We believe that Governor Carney intends to boost UK asset-liability ratios to fight debt deleveraging - as such, we elect ‘not to fight the BoE," MS says as a rationale behind this call.

Copyright © 2013 eFXnews

Intraday Outlooks For EUR/USD, USD/JPY, & AUD/USD - SEB

14 AUG 2013 02:12 EDT

By eFXnews.com

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The following are the intraday outlooks for EUR/USD, USD/JPY, and AUD/USD as provided by the technical strategy team at SEB Group.
EUR/USD: 1.3290 before down. The bounce from yesterday's low is not major, but should ideally come in a 3-wave fashion (“A-B-C”). The first two may be in place and the 3rd ought to stretch for 1.3290 before down again. 1.3188 is a key ref to keep in mind below.

USD/JPY: Rechecking 97.60 before up. Gains were notable yesterday with a few semi-important refs easily broken. The 21day Fibo-adjusted "Base line" however seems to be respected and a mid-body (97.60) retest looks likely before testing overhead resistance again. Newborn longs would likely scramble for the exit should the market unexpectedly fall and close below the 5day average low, now at 96.50.

AUD/USD: Rechecking thought 0.9084/35 support. The market respected overhead dynamic resistance in the attempt higher (to reduce a medium- long-term stretch). The near-term move lower should meet buyers in the 0.9084/0.9035 zone – from where another attempt should be made to/into the short-term Fibo-adjusted "Ichimoku cloud".

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Is Everyone Betting Against This In EUR/USD?

By eFXnews.com

35

30

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It's not a big surprise for us to see major banks crowded in the short EUR/USD trade over and over but what is really interesting this time is how they seem to bet against the same level where their stops are placed around.
That is the 1.3418 June-19 high which Bank of of America Merrill Lynch sees as a 'line in the sand' where its break would force BofA to abandon its bearish view and turn neutral.
In line with this view, BofA maintains a technical tactical short EUR/USD position from 1.3355, with a stop at 1.3420, and a target at 1.2821.
Same for Commerzbank who thinks that as EUR/USD has stalled below the June high at 1.3418, there is little to suggest that the market will maintain a break beyond here,
In line with this view, CB maintains a short EUR/USD from 1.3383 with a stop at 1.3425 and a target at 1.3190.
And same also for Credit Suisse who maintains its short EUR/USD position from 1.3300, with a stop at 1.3435, and a target at 1.3025.
Even Barclays Capital who is running a macro EUR/USD short trade is also betting against this level with a stop at 1.3430, and a target at 1.28.
Putting all together, if the stops around this level get triggered, a quick move to 1.35 will be there before all is said and done. 

Copyright © 2013 eFXnews

EUR/USD Bears & USD/JPY Bulls, 'Awaken From Your Slumber' - BofA Merrill

EUR/USD Bears & USD/JPY Bulls, 'Awaken From Your Slumber' - BofA Merrill

13 AUG 2013 23:35 EDT

By eFXnews.com

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While Bank of America Merrill Lynch has recently focused far more attention on the future of  EUR/USD, USD/CHF and GBP/USD,  BofA now thinks that it's time to put USD/JPY back on the rader screen
"THE 2.5m RANGE TRADE IS FAST DRAWING TO A CLOSE and the LONG TERM BULL TREND IS POISED TO RESUME," BofA projects.
"While Triangle resistance at 99.740 may prove near term sticky, PULLBACKS SHOULD BE BOUGHT for 105.80/106.00, Potentially 109.80. Pullbacks should not breach 96.80/94.90," BofA advises.






Meanwhile, BofA maintains its EUR/USD short trade, particularly following the break of 1.3272, trendline/channel resistance.
"A move below 1.3190 confirms a resumption of its larger bear trend for 1.2823/1.2752 and eventually 1.2457. Bulls need a break of 1.3418 to gain control," BofA adds.

EURUSD Daily Forecast: August 13

EURUSD Forecast
The EURUSD was indecisive yesterday. The bias is neutral in nearest term probably with a little bearish bias. Price is still in a bullish phase but found a strong resistance at 1.3400 which needs to be clearly broken to the upside to continue the bullish scenario. Immediate resistance is seen around 1.3315/30. A clear break above that area could trigger further bullish pressure retesting 1.3400. On the downside, key support is seen around 1.3200 – 1.3150. A clear break and daily close below that area would be a threat to the bullish scenario and could be an early signal of a bearish reversal scenario testing 1.3000.

GBP/USD: Little improvement despite better mood

Market sentiment shows signs of improvement today since early Asian session, when Nikkei soared on a report saying PM Shinzo Abe is considering a corporate tax cut as a way to offset the impact of a planned two-stage increase in the sales tax. Local share markets stand in green, and the UK data has been positive, although far from shocking: inflation yearly basis slowed from a 14 months high of 2.9% past June to a 2.8% rise in July, while house price index growth by 3.1%, up from a 2.9% increase in the 12 months to May 2013.

However, the GBP/USD trades near its daily low of 1.5430 after a spike up to 1.5480 after the news. Technically speaking, the 4 hours chart shows price developing below 20 SMA that lost the upward potential and turned flat, while indicators stand in negative territory, showing no actual strength at the time being. A price acceleration below mentioned low should lead to a quick slide towards 1.5390, 61.8% retracement of its latest daily fall; a break below this last will imply stronger selling interest, eyeing then 1.5340/50 price zone. Price needs to recover above 1.5485 to revert current bearish tone and advance up to 1.5530 price zone.