JPY – USD/JPY continued to trade in a tight range, even though a soft risk-sentiment ( China stock was off another 2% today) in Asia the downside’s move was limited as same as yesterday. The pair is creating a triangle and today’s US CPI/ FoMC minutes will give us a break on either side and suggest the direction for the next few days. As I note, despite the soft risk-sentiment USD/JPY’s reaction has been muted. I play from the long side with placing a stop below the triangle bottom of 124.00 as an intraday. USD/JPY is forming a triangle, 124.10/60 will be key levels.
EUR – EUR/USD ripped from a low of 1.1017, where several technical supports were gathering ( 100dma, conversion and base line), to 1.1065 before the London opening. The risk-sentiment was soft again in Asia which didn’t help the pair to go lower but caused a small short squeeze in my view. The risk-sentiment is still key to find the direction in EUR I think, I cannot rule out another short squeeze in EUR if equities continue to fall. We have US CPI today and I am going to play the pair following the number straightforwardly, resistance 1.1120/30 support 1.1010/20.
GBP – Stronger inflation figures yesterday got the market back into the long sterling trade , stops were triggered through the 1.5690/00 multi high yesterday , but good supply came into the market later in the session .
Today I’ll look to sell eurogbp into 0.7075 region , there does seem to be some real money demand lingering between 0.7030/40 so that should be support.
For cable trade 1.5630/1.5720.