There was nothing much to write about for the past 2-3 weeks, as we were stuck in a small USD range and a breakout didn’t happen either way. It might happen soon…and I expect it to break down. But first, it needs to break the strong support line you see on the USD chart below.
NFP this friday might have given a clue. Not only we had a very small range all of US session, which doesn’t happen often during a big news day, but we also had a strong bottoming on EU during London fix. Same thing goes for GU, which looks like its preparing for a big spike up. So selling EU/GU doesn’t seem like a good idea now, even though everything is possible during a time of uncertainty as now. But if you don’t mind some drawdown, the way up gives me a better profit to risk ratio, no matter the circumstances.
When it comes to UJ, we had another crazy week, which kept going up until 125 was hit and BoJ stepped in, as I expected. Yen became simply too weak too quickly and if BoJ didn’t intervene, it might have become risky for the economy. Looking at the chart, it created a nice top pattern and I expect Yen to gain some strength in the coming weeks. 120 might be tested again and if broken below, 118 is a good target for the bears.