EUR crosses/Flows and Orders

EUR/JPY: Bit of caution advised as rumours swirl

The gossip is that a major EUR/JPY transaction is going through the market at present, it started yesterday and could be ongoing for quite a while. The talk is that a large long-term speculative position is being exited. So far the market hasn’t reacted too much, after all EUR/JPY is only about 75 pips lower than yesterdays’ opening levels. If we see some sharp moves in coming days then we can start believing that there could be fire behind the smoke. (By the way, I’m probably a bit late on this as it was first mentioned yesterday during late European trade).

From a technical perspective, support at 102.15 has held nicely but a break below there could trigger more selling.

  1. That reminds me, one month ago , you have wrote a piece on hedge fund’s position for this pair since we have topped 104 and we failed to break out at this level 😉

  2. Yeah, the story goes that the big macro funds have piled into this pair hoping for a huge end-of-year move higher and that they are sitting on very large (some individual positions could be EUR10 billion). As election nears, they get scared and start to cover. Of course the mkt is small and most of ‘in’ players know this so its pretty easy to start rumours as well, so I don’t believe everything until price action confirms it

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