With the benefit of hindsight, it looks like my first post of the day was the best. I should have quit while I was ahead.
Today’s price action has some of the earmarks of a “risk-off” trade but exhaustion after a big run up in crosses like AUD/JPY and CAD/JPY seems to offer a better explanation. The combo of the two proved powerful, knocking the components back to levels seen in the middle of last week before the strong US employment report implied a recovery that would not be led by China alone, but by both the US and China, the two largest engines of the global economy.
USD/JPY is showing no signs of a fast recovery despite holding the top of its range from last week which was broken early Friday morning after payrolls. The patient should hang in there, while the hyperactive should get out of longs at flat as the buck struggles to recoup levels above 96.10.
