EUR/CHF: Hoping to buy near 1.2270
EUR/JPY is undergoing its buy-the-rumour-sell-the-fact experience and it has dragged EUR/CHF lower with it, tripping trailing stops below 1.2385. Any rallies now back to 1.2400 are likely to meet with plenty of sellers and I've thrown a hopeful bid in at the 61.8% retracement (1.2070/1.2565) at 1.2270.
EUR/USD: Trading near session highs as Europe opens
The ZEW survey may add to volatility a bit during European trade but I must confess that I have no strong view at the moment. I'm still favouring a very slow and gradual rise in EUR/USD over the next few months with most of the focus remaining on the crosses. On the day, I will sell EUR/USD near 1.3425/35 and re-load on dips to 1.3300. EUR/GBP remains in a solid bull trend, EUR/CHF is consolidating 1.2385/1.2455 and EUR/JPY is also consolidating just below 120.00. In other words, the main crosses remain bullish.
Most reports from the interbank market have EUR/USD buyers outweighing sellers but it will remain a slow grind higher imho.
AUD getting a boost from commodity market
China has raised its booking prices in the steel market for the 3rd consecutive month and this is giving the AUD some bullish sentiment today. The AUD/JPY market hasn't suffered from the same selling pressure as USD/JPY, allowing the commodity market to influence the Aussie.
USD/JPY: Longs getting very nervous; safer to sell intraday rallies
Despite the best efforts of the BOJ, the market is simply overly long of USD/JPY still. It has risen 10 big figures on verbal intervention and now that something actually has happened, it starts to drift off. That's FX market logic for you.
I think that selling any rallies back to 89.50 looks like a logical play but keep positions smaller than usual as it will remain whippy. My target is 87.80/00 area and if we get a bounce out of there then I will buy USD/CHF (that's FX and Irish logic mixed :) ).
USD/JPY: Then again, maybe everyone gets stuffed
Which would be the normal course of events in the FX market! First USD/JPY shorts get squeezed after the announcement and then we get a 'buy-rumour-sell-fact' reaction which stops out the bulls as well? That would be pretty normal really.
BOJ: Probably enough there to satisfy the Yen bears
The 'open-ended easing' should be broad enough to encourage the market into some more Yen selling although the lack of a timeline will worry some.
If I had been short USD/JPY heading into the BOJ, I would probably cover now and take the small loss. If I'd been long, I would probably have a trailing stops now below 89.30. Luckily I was square and I'm staying that way!
USD/JPY: 2% inflation target but no set timeline
USD/JPY zoomed up to 90.05 but is struggling to hang on to the gains as details remain thin on when this inflation target is to be met.
Yen dealers bit trigger-happy but no announcement yet
Quick spike up in the Yen crosses on old headlines and rumours but as yet no announcement. Normally happens around this time so don't go too far away.
AUD/USD: Sad days when market is excited by a 20 pip move
The AUD/USD has been stuck in neutral for the last few weeks and it doesn't take much to get the market excited now. Some modest corporate buying and decent buying flows in the NZD/USD have helped swing short-term momentum for the Aussie; its now at 1.0540 after opening at 1.0515.
Opportunities in non-Yen pairs post BOJ
One of my favorite pastimes is looking for trades in pairs which shouldn't be affected by currency-specific risk events.
Today's BOJ decision should only affect the JPY pairs but invariably we get pairs like GBP/AUD or EUR/CHF making moves when some big Yen event happens.
Wait for 'silly' moves in these sort of pairings when the Yen market turns volatile and then take intraday trades looking for the market to return to equilibrium.
For instance, if USD/JPY starts falling heavily after the BOJ but EUR/CHF rises temporarily, then I'd look to sell as it will usually follow the EUR/JPY lead or at least return to 'normal' levels.
Flat trade ahead of the BOJ
Very little happening this morning in Asia and it's likely to stay that way until the BOJ's statement this afternoon.
Get those chores done and have some lunch as it will be a lot busier later on.
USD/JPY: Throw short-term technicals out the window
Big risk event today and its not the time to be following the technical handbook. Nevertheless, we might be able to figure out where all the stops are by looking at the short-term charts? I've updated the USD/JPY 2-hour chart in the members section.
Expect fairly quiet trade ahead of the BOJ decision
The BOJ will be starting their meeting at an earlier than usual time today, probably because they have more to discuss than usual. I suspect that most of the main players have already done their pre-meeting positional adjustments so we should have a fairly quiet Asian morning.
Main interest will be focussed on this afternoon's statement, not on the rate decision, although the amount of extra spending will of course have a big impact on market sentiment.
I'm really not sure at this time whether or not to expect a sell-rumour-buy-fact event so I'm staying square on the Yen and will await some trading opportunities.
GBP staying weak in overnight trade
I've updated the medium term technicals for both cable and EUR/GBP in the members section. Cable is sitting on its 200-week MA and EUR/GBP is trading near a 50% retracement level at .8415, so I am not overly bearish at current levels. Momentum on the sterling is definitely bearish but selling GBP rallies is my preferred play.
BOJ will start meeting at earlier than usual time tomorrow
Interesting decision by the BOJ to start tomorrow's meeting at the earlier than usual time of 8am Tokyo time.
Have a good day, catch you tomorrow for the BOJ's fun and games.
EUR/GBP: Might be some value in trying to pick a short-term top
Overall I remain bullish on this pair but I've been trading it since 1986 and it does nothing in a straight line. With cable touching the base of its trading channel, and crosses like GBP/JPY also at or close to 'value' levels, there might be some merit in trying to pick a short-term top in EUR/GBP.
I'm not sure on levels yet, its a matter of watching and waiting but I'm not averse to selling somewhere say near .8430/40 in anticipation of a quick 100 pip dip?