We are dip buyers on precious metals heading into the new year, it remains one of our highest conviction views at the moment for early 2023, just keep in mind it’s a longer term trade, NOT short term

What a year has been for the markets, high inflation, extraordinary monetary policy tightening from the FED resulting in stocks bonds and crypto bear markets, firm hawkish pivots globally from most central banks, energy prices going nuts, and we can mention many more, in other words, 2022 has been quite a year and will lead to plenty of exceptional macro opportunities into early 2023, with that said, you already know one of them which is also our favorite trade at the moment, long precious metals on dips.

A warm thank you and a Happy new year from the BeSomebodyFX Team

As per schedule, new crypto update published, the current macro context is quite unique so it’s an important update, for questions you can reach out @JayRally

Technical setup we are watching to short EURCHF…

Fundamentally for us it makes sense to see medium term CHF strength going forward thanks to the SNB operations to support the CHF and the hawkish ECB which ends up being more bullish for the CHF than for the EUR itself.

So, if we get a spike above 0.99 on EURCHF into what is both technical resistance and the range high, we will be using it to position short, target down to 0.9750

Stopped on the EURCHF shorts, no fakeout as we would have wanted, it just blew through resistance

We are keeping an eye on some AUDNZD longs for a medium term hold, will post more details about it early next week if we go ahead with the trade, we are NOT long yet, just monitoring to potentially buy on a pullback

Long AUDNZD as AUD should be one of the primary beneficiaries of the China reopening flows and sentiment…

The pair is already trending higher because of that and China is just now turning its engine back on so we think this has room to continue all the way up to 1.12.

Both AUD and NZD benefit from a pick up in Chinese economic activity but the AUD should have a slight advantage in the race between the two thanks to its ties with copper prices which are doing very well, and the easing political tensions between Australia and China itself.

Long story short, we like to be positioned long on this pair for a medium term hold as we expect it to extend the ongoing bullish macro trend up to 1.12

Slightly different structure than what we were planning on AUDNZD but still bullish for us and we are long.

A reclaim of the 1.08 support level would be a good technical confirmation for a resumption higher too

A more classic way to trade a positive China sentiment is also a straightforward long on NZDUSD or AUDUSD…

We are still bullish on the AUDNZD mentioned above but the same theme could be diversified against the Dollar as risk sentiment holds reasonably well across the board and the rapid China reopening keeps dips supported in risk assets.

Obviously, it’s NOT a view free of risks as without a doubt markets remain vulnerable to recession fears that can get sparked at any moment in time for any reason, but overall, soft landing vibes are able to prevail at the moment as the boost that China will give to the global economy is quite meaningful.

We will be tactically jumping from one to the other depending on what we see and how structures develop, just know that we think all three pairs mentioned should stay supported on dips and should likely keep trending higher

Now monitoring for us to jump long over the next couple of days.

The best technical scenario for us would be if we see price build some bullish structure around 0.70, maybe even tap below the round number again to stop some early buyers, build a base, and then break back higher after the FOMC, that would give us the best risk reward to target 0.74.

All this barring Powell doesn’t go off script later, if the FED talks too hawkish the plan flips

Still long AUDNZD here, we think the AUD remains a good expression of the China reopening sentiment so letting the trade run, 1.12 remains the target.

It is also worth noting that the combo of softer FED with China boosting cyclical growth creates a nice path to a soft landing for the global economy, it’s not directly related to AUDNZD but well related to the AUD in general, especially AUDUSD.

And arguably way too many are still underpricing a soft landing scenario so we think there’s plenty more room for the AUD to continue to trade well, things can change of course, but so far we continue to ride this sentiment

To keep you up to date, the RBA on Tuesday further supports the path for AUDNZD longs at the moment, they delivered a 25bps hike with some hawkish forward guidance hinting at more rate hikes needed which was the perfect scenario for us.

Simply, these latest developments keep us long here but other than that not much else to add, we just let the trade run, 1.12 remains the target.

Meanwhile we still also have our attention on AUDUSD, but as anticipated, technically we want to see that 0.70 level reclaimed to get us long, keeping in mind also the CPI risk next week, in other words, AUDNZD for now is just the better option