With the BOJ meeting now behind us, we may find that the Yen market takes a well-earned rest and the market starts focussing elsewhere for its sentiment leads. Equity markets continue to perform well and this should guarantee some risk-on sentiment whilst on the economic calendar the main event will be the Australian CPI data.
The AUD has been completely sidelined for the last few weeks with hectic moves in the JPY, CHF and GBP not having any effect on a range-bound AUD/USD. Poor domestic data is being offset by strong commodity prices and positive global sentiment. The market has all but ruled out a rate cut by the RBA next month so it will take a very surprising CPI number to change that feeling.
EUR/JPY had some wild moves yesterday, firstly around the BOJ decision and then after a number of totally unfounded and untrue rumours circulated at the start of European trade. Positive risk sentiment should support the cross but profit taking on existing longs will keep the topside capped for now. Sounds like a perfect recipe for range-trading and I like parameters at 116.50 and 119.00 (see chart).
The exact same argument applies to USD/JPY and I would look to a possible 87.00/89.50 range over coming sessions (see chart).
EUR/USD looks to be consolidating its recent move higher and should range trade 1.3260/1.3400 (see chart) before eventually moving higher. Interbank reports still suggest that EUR buying is one of the strongest factors at play presently but nobody is chasing the market higher just yet.
EUR/CHF is also undergoing a retracement and the break below 1.2385 set off some trailing stops overnight. I’m still very much in the buy-dips camp here and the level I’m hoping to buy at is at 1.2270 (61.8% 1.2070/1.2565). Rallies back to 1.2450 should meet with plenty of grateful sellers (those who bought in at wrong levels near 1.2500).
The GBP steadied overnight with cable settling near its 200-week MA at 1.5825 (see chart) and the EUR/GBP rise halting near a 50% fibo at .8415.
Good luck today.