The JPY crosses are under pressure and I expect this trend to stay with us early in 2016.
USD/JPY: We start 2016 at pretty much the same levels as we started 2015 but I think we will see bigger moves this year and I’m in the bear camp. We saw a sharp 150 pip sell-off yesterday but I sense the short-term players might be short at the wrong levels and we could get a squeeze back above 120.00 where the trailing stops will be placed. So I’m staying square for now and looking to sell into any 100 pip rallies.
EUR/USD: Will be driven by EUR/JPY to a large degree during Asian trade and I have no strong view on the levels at the moment.
AUD, NZD and CAD: All looking soft in the current risk-off environment but I expect range trading against the USD and the bigger moves to come against the JPY. USD/CAD is starting to look a bit exhausted so maybe wait for option activity at 1.40 to play itself out and sell into that exhaustive rally.
GBP still looks tired and I feel that we will see cable levels back below 1.40 and EUR/GBP back towards .78 in coming weeks. I’m not a big fan of the USD at current levels so prefer to play this view through EUR/GBP and buy any intraday dips towards .7300.
Good luck today++