After the big sell-off in Asia and early Europe yesterday, it looked like the JPY crosses had cooked their goose and were about to go to freefall again along with equity markets. The fact that USD/JPY actually rallied somewhat during the NY session is interesting. It looks to me that the market has no real momentum, in one direction or another, and traders are jumping off their trades quicker than usual as they lack conviction.
GBP/JPY is an interesting pair to watch. It fell very heavily yesterday but has since bounced 300 pips. EUR/GBP also managed to break below some significant buying interest at .9275/80.
Something seems to be happening in the pound. I know I have been saying this for a few weeks but I think the market is short sterling and we are likely to see a very sharp significant bounce in coming weeks, especially on the crosses. There is of course little fundamental justification for being long sterling, but when the market is short and has fallen far enough, then the only way is up!
