Markets are still pretty choppy and there don’t seem to be any dominant factors influencing the major currencies.
- Commodities remain influential, with the oil market still looking nervy (and likely to affect Yen crosses) but Gold trying to form a significant base;
- Bond markets haven’t had much information to go on and are in holding space (notwithstanding the occasional positional rout);
- Equity markets have been tottering recently but as long as the Fed, BoJ, ECB etc maintain their policies, stocks are likely to be underpinned.
Both the cable and EUR/USD have had periods of interesting price action in recent sessions and both look bearish to me in the short-term. There is still plenty of optionality at 1.2500 in EUR/USD which will act like a magnet.
USD/JPY has been consolidating but the failure to break significantly higher after the GPIF news at the weekend suggests to me that the market is already long of USD/JPY. I’m also hearing reports of decent selling interest near towards 107.50.
Which leads me to EUR/JPY. I’m trading this pair with a bearish bias and will update levels as the day progresses.