Many old-time FX traders will be loving these markets with plenty of swings yet fairly dominant trends. The weakening of the JPY has now been followed by a weakening of the CHF, whilst the EUR has begun to strengthen and may soon be joined by the USD. These are markets for buying dips and selling rallies in various ‘legs’ of the crosses and real FX traders will be having a ball.

The CHF was again the big loser overnight driven mainly by a flow out of Swiss bonds. CHF/JPY fell heavily as this was one particular cross pair which was clearly out of sync, having risen too far too fast.

EUR/JPY also fell heavily after resistance near 120.00 was confirmed and the profit takers arrived in droves. The dominant up-trend remains in play and last night’s fall stopped at the 38.2% retracement level (see chart) and this level should now attract buying interest. A clean break below there targets 116.00/10.

USD/JPY triggered trailing stops below 88.50 but was unable to generate any more bearish momentum. Once again the up-trend is dominant and currently unwinding overbought tendencies. Bank research suggests that most of the big Yen short positions are in Asia, so any big falls in USD/JPY are likely to happen in this time zone.

EUR/USD triggered the well-chronicled trailing stops below 1.3320 and 1.3295 before pulling up just shy of heavy bids at 1.3250. EUR/JPY profit taking was also a major factor. I’d look to buy any intraday dips towards 1.3250 whilst resistance at 1.3400 is also clear.

The AUD/USD is totally on the sidelines with neither currency attracting the market’s interest at the moment. Sell orders remain heavy near 1.0600 with stops immediately above 1.0605.

The GBP regained some lost ground after decent domestic data and order books suggest that .8260/.8320 should contain the cross for this session at least.

Good luck today.