• USD/JPY: The prospect of increased intraday corporate flows, uncertainty surrounding the US debt ceiling and positional adjustment post BOJ all suggest that USD/JPY should see continuing and perhaps increasing intraday volatility. Stops are likely to be significant below 127.00 and may well be targeted but heavy real money buying is expected on any approach to 125.00. The topside again issued a sharp rejection at the 21-day MA but shorter term technical indicators remain in heavily oversold territory. In other words, it’s likely we will see tests of both sides of the market at some stage today.

We’ve just seen AUD/JPY shorts get squeezed and technical stops above 74.60 were triggered. The big levels seem pretty clear here, with big figures at 70-77 providing support and resistance. I prefer to look for exhaustive spikes to re-launch shorts for a final test lower.

I’m a bit annoyed that I missed the buying opportunity in cable near 1.2450 but I expect to get more chances. I’m hoping to build an aggressive long position for a move into the high 1.30s.

AUD/USD should be s/t toppy near .71c and support should be powerful on dips to .67c. Range trading advised until the noise is over.

Ergo, trade of the moment, sell USD/JPY rallies for a move towards 102 in coming weeks.

It’s Friday and Wall Street had another shocker overnight, which means that the risk off plays will be front and centre. I’m not exactly sure how far we can go but I hope to start picking up some AUD/USD on the approach to .6735 and my ideal entry levels for medium-term longs in cable look to be around 1.2410.

USD/JPY looks like it could fall off a cliff and I’m staying small short there and will add on the day if bearish momentum starts to build again.

Should be an interesting day

I’m trying to trade the upswings in cable and any 50 pip dips are buying opportunities whilst this bearish USD momentum holds sway. I’m expecting this 1.2410/20 level to provide some short-term resistance and dips towards 1.2360/70 are now buying zones. I feel that we will see levels near 1.28 before too long.

AUD/USD is headed to .73c in my view but this may take some time. Patience required.

EUR/USD has the potential to really hurt some of the big shorts out there but personally I feel a bit nervous about being overly long and I prefer to look elsewhere. Similarly with USD/JPY; it will head towards 100 eventually but the market might already be too short the JPY crosses.

I’m still in total disagreement with the majority of analysts out there who have been expecting a strong USD rally. Any structural liquidity issues, especially in emerging markets, which might be USD bullish will be more than outweighed by the fact that the collapse in global trade has led to a huge drop in demand for USD. Add in all sorts of uncertainties surrounding US Treasuries and I could not feel at all comfortable in holding USD for any length of time.

So what to trade?

USD/JPY: For now, be short and stay short for a test of 100.

AUD/USD: Any dips driven by AUD/JPY selling will be short-lived imho and I’m in dip-buying mode. The levels I’m watching are .6325/50 to begin with then .6260-80. Once the USD really turns, I’m expecting a 15% move higher in the AUD/USD.

Cable: Similar to AUD/USD, any dips will be driven by GBP/JPY selling and I feel that levels around 1.2250 will provide good value entry levels. That said, with cable we always need to be particularly vigilant as 300 pip over-shoots are almost the order of the day! I’m not leaving any orders, preferring to trade it on a day-by-day basis.

EUR/USD: The EUR looks pretty ordinary on most of the major crosses so I’m leaving it alone for now. Speculative positioning in some of the EUR pairs is getting towards ‘painful’ levels so no doubt we will get a very nasty stop-loss driven rally one of these days.

The levels I’m looking at are 129.10-25 for a topside break in GBP/JPY, 117.50 to provide solid support in EUR/JPY and 71.50 to start providing base support in AUD/JPY. I’m waiting on some increases in bullish momentum before jumping on board and I will definitely be out before the close of business on Friday as I don’t fancy a risk on position over the weekend!

CONCLUSION: The market is starting to get comfortable with the trends which started earlier this month. Short-term positioning is getting over-stretched suggesting that we may see a short-term rebound in the USD. Trade-of-the-moment: Buy dips in AUD/CHF towards .7425.

I have closed my USD/JPY position for now and am officially clueless. I will look to re-sell any rallies onto the 105 handle but with fairly tight stops above 106.00.

I’ve got no idea what to do with EUR and GBP, and my bias towards buying the AUD is also on hold until after the election storm has died down.

This feels like a ‘reactionary’ market where it’s best to keep all powder dry and to take advantage of all silly moves and believe me, there will be plenty of them!

I’m not taking any positions but I’m definitely looking at trading the Yen crosses with a bearish intraday bias. These markets are made for swing traders, not position takers. It would not surprise me at all if USD/JPY were trading below 113.00 before the day is out, after all look where USD/CHF was yesterday!

This has nothing to do with fundamentals and everything to do with market positioning.

I’ve sold smalls at 104.48 and will sit and watch for a session or two.

The next major topside technical milestone for the cross is around 105 and the next topside target for USD/JPY is significant optionality around 117.50.

USD/JPY has been crushed almost 100 pips lower from earlier spike highs at 115.40.

FXWW chatroom.

• USD/JPY has found a resistance level at 108.30;
• Oil prices slipped again overnight which will put pressure on pairs like CAD/JPY;
• CAD/JPY support/resistance levels at 95.10/96.00 intraday and might be worth trading with a bearish bias if you think oil will slide further during Asia;
• AUD/USD has been capped again by .8820/30 so AUD/JPY might also be worth some bearish consideration.

• 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.

According to sources, the Japan government pension fund (GPIF) – the world’s biggest with a 1.2trln USD war chest – is being urged to cut low yielding JGB holdings and increase their equity holdings from 12% to around 25% in order to boost returns. The proposal is for the GPIF to cut bond holdings from 60% to 40%. The fund is also likely to boost holdings of foreign equities

Obviously the timeframes on such decisions can be quite longish-term but the effect on short-term JPY sentiment is likely to be significant.

During the Asian session, AUD/USD and AUD/JPY look like the pairs to be trading whilst during European trade you can substitute the EUR or GBP for the AUD. The CAD comes into the reckoning during North American trade and there is plenty of volatility to please everyone.

Risk-reward and recent trends suggest to me that there could be more downside potential in the JPY crosses but I’m keeping an open mind. Good luck today and TGIF.

“Whenever I think of the past, it brings back so many memories.”