Currencies

The Yen is again the focal point of interest in the FX market after the G20 failed to make any mention of Japanese policy toward its currency. USD/JPY is again challenging the physical and psychological barrier at 100.00 whilst some of the other crosses are also approaching important resistance levels. There is nothing of note on the economic calendar so we will rely on flows for market movement.

There is still some heavy barrier protection reported ahead of 100.00 in USD/JPY and with real-money offers also reported, it will be no easy matter for the bulls to crash through this barrier. IMM positioning reports also show the Yen shorts have increased yet again and that might also encourage some profit taking ahead of a big level.

AUD/JPY is stalling ahead of a Fibo resistance level at 102.85 which proved to be the high on Friday afternoon last.

Chart

This will attract sellers but also implies that there will be stop-loss buyers directly above.

EUR/JPY has opened the week back above 130.00 and a test of recent highs at 131.10 would definitely seem to be on the cards. With EUR sentiment on the mend, I favour buying early dips towards 129.60/70 for a move higher later tonight. Keep stops tight however, as Yen positioning is a concern.

Chart

EUR/USD is trendless and is moving purely in line with action on the cross pairs. Comments from the ECB that interest rate cuts would probably ne ineffective gave the EUR a boost on Friday.

EUR/GBP triggered plenty of stops below .8530 on Friday and once this was done it rallied with ease. I’m in the buy-dip camp here although broad range trading between .8500/.8650 is the most likely outcome.

EUR/AUD is in consolidation mode between 1.2600/1.2750 and I am still bullish on this pair for a move to 1.3200 in the medium term.

Chart

The AUD/USD closed last week on its lows despite decent rallies on equity and precious metal markets. There is support nearby at 1.0265 and corporate bids are reported near 1.0230/35, but sentiment is turning in my view and I prefer the sell-rally strategy for now. 

Good luck today.