Carry trades accept the central banks’ invitation

By: Jamie Coleman

Don't you worry 'bout a thing, pretty mama. That's the message from the central bankers of the globe. Draghi has Europe covered while Bernanke has most of the rest of the world under his spell. Risk is very much "on" and even relative dogs like EUR/JPY are making impressive gains. That cross broke very significant resistance in the 101.60/75 region and has exploded nearly a full JPY from there. Traders think the BOJ will do what it can to keep the USD/JPY side of the cross aloft via more easing or perhaps even intervention if we were to fallback to the 77.00 area. 102.73 is next resistance, the 50% retracement of the 111.40/94.06 decline.