USD Crosses and Apple

EUR/JPY rallied to my suggested sell limit at ¥129.80 and has since retreated nicely, trading as low as ¥127.62.

Source: Bloomberg

My initial technical target of ¥128.60 (the falling trend support) was achieved and now the June 2013 lows of ¥125 could come into play in the coming weeks. Stay short and I feel looking to sell rallies in the pair into ¥128.60 (if not in a position) looks compelling. If in the trade from ¥129.80, then I feel it prudent to move stops to breakeven.

My GBP/USD idea from $1.5080 is working well and has broken below the series of lows through January. The position is 150 pips in the money at present, so it would be prudent to move stops to $1.5020 to lock in some profits. Stay short for now as trend and momentum indicators suggest rallies will be contained. The clear target on the trade (and where I feel taking profits could be prudent) is just above the March and July double bottom at $1.4850.

AUD/USD is seeing some buying pressure, but my short idea from $0.7796 is still in play. Stochastic momentum is still suggestive that short positons are the right trade and the pair continues to hold under the five-day moving average as well. Additional talk of easing measures in China could support somewhat in the short-term.

Apple – I looked at both the fundamental and technical picture heading into the much anticipated release of the  Apple Watch and was interested to see if buyers emerged around the 38.2% retracement of the January to February rally at $122.76. This clearly hasn’t emerged, so I am keen to see if we can get a pullback into the $120 to $119.50 area, which I have highlighted as the key support zone.

The fundamentals of the company are solid and certainly warrant long positions into the ‘buy zone’. However, the technical picture is becoming much more nuanced with 20-day moving average (the red line) starting to move sideways, suggesting range trading could be a better strategy. This is worth watching.

We have already seen an 8.5% pullback from the February high, so the buy area I have looked at would result in a 10% move lower and coincide with a move in the consensus forward price to earnings ratio of 14x.


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