Cable: Should now find support below 1.6300
Europe will probably walk in and say ‘what the hell was the Asian market thinking?’. Then again they are used to trading in deep liquid markets and they should have a go at trading Asian ‘holiday’ markets sometime.
One of two things will happen. Either the Europeans see today’s move in the Yen crosses as an exhaustive spike and they will undo all the move, and then some. Or, they see this as a corroboration of the bull trend in the Yen crosses and they pile in to buy some more.
Technically speaking, the most important move has been the bullish break in cable so risk-reward would suggest buying dips back below 1.6300, with reasonably tight stops below the day’s low, looking for a move towards 1.6500 in coming sessions.