USD/JPY: Hefty profit taking to start the year

Prime brokers are reporting some heavy profit taking in USD/JPY overnight which had a knock-on effect on other speculative positions such as the short EUR trade.

  • Technical resistance at 120.70 in USD/JPY continued to prove very solid and this encouraged IMM accounts in particular to start booking profits. I’ve got no view on USD/JPY at the moment.
  • Modest short-reduction was also reported in EUR/GBP although movement there was in a tight 30 pip range.

Macro players continue to reduce long-term Gold shorts although the general consensus amongst the bigger banks seems to be that 1170/1230 will contain prices for the next week or so.

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