Prefer to trade USD/JPY and AUD/USD pre- and post-ECB
The EUR will be whippy and silly at times I’m sure and even the GBP will get turbulent with EUR/GBP flows. I prefer to trade slightly ‘independent’ pairs like USD/JPY or AUD/USD during EUR-related risk events like today. We should get volatility but prices should return to some sort of normal value soon afterwards.
- USD/JPY is in sideways consolidation broadly between 115/120 and I think this could continue for quite a while yet as the market makes up its mind about the next big move. My bias is mildly bearish, simply based on levels of positioning, and I will happily sell any silly rallies.
- AUD/USD looks set to test .8000 and there will surely be stops aplenty below there. I will happily buy any exhaustive sell-offs as I still believe the AUD is harder than most in a market of soft currencies and additionally the market is already quite short.