Best to sit back and see how market wants to react
- The statement from Mr Bernanke that all options are still on the table and policy decisions are data dependant would seem at first glance to be risk-positive and USD-negative.
- No sign of any big moves in AUD/USD or the Yen crosses would seem to belie this notion.
- No sign of any sharp moves higher in EUR/USD so last week’s sharp short-covering rally might have been a one-off event?
- EUR/JPY still trying to form its right shoulder.
In other words, the market gave no big hints in overnight trade and I think it’s probably best to sit back for a session or two and see if the market does start to move one-way.
I remain overall USD bearish with a slightly risk-off bias so I still prefer the sell-rally play in USD/JPY.