The down trend in Japanese Yen ( and subsequent rise in risk appetite ) now looks to be “officially broken”. We clearly understand the relationship here.
It would take an awful lot to imagine pairs such as AUD/JPY or CAD/JPY reversing here, and putting in new highs. Very unlikely.
I am looking to start ( in typical fashion – with single contract entries ) short positions in any number of JPY related pairs with particular focus on JPY vs AUD, NZD, CAD ( the commodity related currencies ).
In general I expect to see JPY rise…..and USD fall along side risk.
I would be wary of trades in EUR/JPY , CHF/JPY and perhaps even GBP/JPY as “if/when” USD continues to fall….the E.U related currencies will take inflows so…..bigger moves to be seen in JPY vs Commods.
Still holding USD shorts – YES.
This is pretty “macro” here everyone, as at some point you’ve got to pick a side, plan your trades and put that plan into action.
If markets continue to trade “sideways” in general well……these trades could just as easily wallow/sit in the mud as the continued “distribution” here across the top goes on.
Broad strokes have me seeing a lower low now firmly established in SP 500 suggesting we bounce, and look for the ultimate short entry ( long JPY vs Commods, Short USD against E.U currencies ) over coming days.
If the media has us waiting until Sunday for more bullshit coming out of Greece – so be it. Small entries as mentioned above can be made prior…with thought in mind of either “adding to shorts higher” come Sun/Monday…..or getting some orders in “underneath” these pairs..allowing momentum to pick us up.
I see the table set for a significant move lower in risk appetite so….the breakdown above gives you the plan across most of the major currencies “pending” this plays out,,,,and “doesn’t” just continue trading back into the range.
Have fun. Enjoy some sun. Stay out of trouble if you can help it.