JPY volatility carries through to Monday morning
USD/JPY is trading above 98.25 in early interbank trade and the extreme volatility which started after the BOJ on Thursday is certain to continue. Buying dips is the way to go for now and we might even see a test of 100.00 in the next few sessions. I'd look to levels near 96.50 now for support.
Cable orders: Large stops above 1.5280 and 1.5300
I'm not tempted to sell this time in cable near 1.5250 and in fact I might try buying an early European dip for a move higher later tonight? It's NFP lottery night of course, so anything can happen. My hot-hand of recent weeks feels like it's cooling off so I will keep my positions fairly small or else trade relatively low risk pairs (like EUR/AUD).
USD/JPY flows: Market aimed at downside stops but came up just short
Big Japanese and Swiss banks are reporting stop-loss sell orders below 95.70 (a reliable hedge fund source tells me) and the first attempt to trigger them came up shy; the sellers had to scurry for safety. Looks like USD/JPY is going to stay volatile well through tonight's NFP.
USD/JPY technicals: 38.2% Fibo support at 95.50
The first Fibo of yesterday's big vertical upmove from 92.75 to 97.15 comes in near 95.50.
JGB futures sell-off sends USD/JPY tumbling also
Some talk that there might have been a 'fat finger' involved but no confirmation of that.
Turnover above 97.00 was very heavy, mainly driven by Japanese corporates but the big Japanese banks were also the main sellers 97.10/20.
USD/JPY: Prior highs at 96.70 now first support
Best be careful if short of this pair as I'm not sure how far it or the Yen crosses can run.
USD/JPY: Takes out recent highs
No point in fighting this trend and recent highs at 96.70 have now been breached. It would be a brave person who would bet against this pair heading to 100.00 pretty quickly. Looks like Japanese corporates still need to buy USD but there will be barriers popping up at regular intervals.
EUR/AUD: Technical trade, long with stop below 1.2320.
I've posted the chart in the members section; possible double bottom here so I've taken a purely technical trade at 1.2400 with a stop below 1.2320.
Cable: Look to buy a break above 1.5280
It's all about the Yen crosses now and if cable breaks above very solid resistance at 1.5250/80 then we are likely to see large stops going off. I've been lucky twice selling near 1.5250 for pullbacks but I'm not willing to try my luck for the 3rd time!
Next major resistance in GBP/JPY is at 148.00.
EUR/JPY: 600 pip dips and 500 pip rallies
It was only a few weeks ago that EUR/JPY fell from 125.00 to 119.00 in a 24 hour period and now we've seen a rally from 119.00 to 124.50 in about the same time. We certainly cannot complain about lack of volatility!
The moves by the BOJ were certainly a game-changer and it's hard to see the market getting bullish on the Yen in a hurry, unless of course positioning gets over-extended too fast. Buying any sort of dips now in USD/JPY looks like the obvious play and we only need to see another session like yesterday and we will be back trading near 100.00. Don't discount it.
Let's not sell EUR/JPY then
The JPY is on a runaway train and showing no signs of slowing. I sold small USD/JPY at 95.20 and I may struggle to get them back, the way its presently looking. EUR/JPY has traded to a high around 122.70 and I think I have enough risk on the table with my small USD/JPY rather than getting in deeper.
EUR/JPY: Worth re-selling near 122.50?
Don't tempt me! Might the ECB follow the BOJ lead and escalate the currency wars? Might it make sense to sell EUR/JPY near 122.50 with a tight stop? Last night's US data doesn't bode well for tomorrow's NFP. Now you've got me started!
AUD/USD: Option sellers from earlier now likely on bid near 1.0440
Easy money if you can get it! Those option-related sellers from earlier at 1.0485/90 are now thought to be buying them back for a swift 50 pip profit. Why work when you get money handed to you!
Also this aggressive Japanese easing will escalate the on-going currency wars, which is probably going to increase demand for the AUD overall.
USD/JPY: Next technical resistance at 94.90
No sign of the rally to run out of steam just yet. Technical resistance at 94.35 has been broken and the next level to watch will be a daily high at 94.90. I've put a small offer in at 95.20, let's see how that works.
Big banks impressed by strong BOJ language
Citi are talking of 'shock and awe' whilst BoAML say that Kuroda is clearly trying to exceed market expectations and HSBC refers to the BOJ coming out with a bang. Next risk event is of course the press conference in an hour or so.
I'd suggest a wide 93.25/95.25 range in the next few hours with an obvious bullish bias but we still have to pick our entry levels carefully.
USD/JPY: Now over 100 pips higher, when is this rally silly?
Intraday traders will also be looking for silly over-bought conditions but I'd be careful about selling it too far south of 95.00, given the present bullish euphoria. High so far at 94.15 and more to come it seems.
EUR/JPY: Trailing stop taken out above 120.40
I'm not sure if I'm the only short in the market with trailing stops? Probably not, which means at some stage the EUR/USD should turn around and head higher once the USD/JPY march higher runs out of steam.
Bulls taking charge in USD/JPY and buying dips back to 93.25ish now makes plenty of sense.