I’m seriously reassessing my medium term bullish EUR outlook after the price action overnight and this morning in EUR/JPY. The market, particularly hedge funds and CTAs, are massively long of this pair and last night’s move might only have been the first of many big sell-offs?
If we can regain 123.00 and stabilise around there for a few sessions then I could be persuaded to buy some but until then, I will sell rallies in expectation of more downside cleanouts. (One good source estimated that less than 5% of open long positions were trimmed this morning!).