Equities moved right back up today, making up a lot of yesterdays losses, even with a dearth of any significant news flow. After a shaky start on Wall Street, the buyers were eager to get right back in following yesterdays sell off, bringing the yen crosses up nearer to the top of their recent ranges, with GBPYEN reaching my 149 target from 2 nights ago. This pattern has happened time and time again for almost a year now. You may not agree that we are on as solid an economic footing as Wall Street seems to think, but you cant argue with the bullish sentiment that still exists in the market. I believe we are primed to go higher, and we may get our catalyst with significant U.S data tomorrow and Friday. I will be holding my 147,10 GBPYEN long and look for a 150+ target for now.
Just want to have a little word about Sterling, we had Manufacturing Production printing a little better than expectation this morning with some hawkish words from the BOE: ‘UK may have to raise rates this year and that the Bank should not increase its QE programme’ – Sentance; which helped make Sterling a big winner today. I believe the pound strength will persist, the data should continue to surprise to the upside (they have pumped enough stimulus into the economy) and the market should like the seemingly inevitable new Conservative government come election time in May. So, with that in mind, I will favour POUNDYEN longs over EUROYEN longs, this Greece thing just isn’t going to go away and with potential issues in Portugal, Ireland and Spain to come out which should continue to weigh on the Euro.
The EUROUSD again failed at resistance today even with the decent swing back on equities. To be honest, I really haven’t a clue where the dollar wants to go, either does the market it seems! If we do see some positive U.S data tomorrow and Friday, it will be telling to see if we do get another bout of dollar strength.
U.S Retail sales, Unemployment claims and Import prices along with the ECB rate decision means we should see a fun and volatile day tomorrow.
c.
