I’ve just had a long look at the EUR crosses, trying to find some reasons to be bearish, and the one pair that really sticks out on many fronts is EUR/JPY. The main argument at the moment is that the big macro funds are quite long of this pair still, having bought it aggressively from 105 up through 120 and they have had little reason to become overly worried about their positions. I’m not sure what might drive them out, but the technical picture is showing a nice topping pattern on the dailies (see chart). Of course for EUR/JPY to fall aggressively, we would probably need to see a big risk-off event, and that doesn’t tie in well with my bullish AUD prognosis. Opinions change I guess, best to leave it to the market to figure it out.
I’ve taken a small EUR/JPY short at 128.70, let’s see how it develops.