Dollar/Yen Sell Order Placed at 100.15 by 200-Day SMA
WEDNESDAY, 04 MARCH 2009 09:52:44 GMT
Fundamental Catalyst – Across the board price action has been quite interesting overnight with familiar correlations falling back out of line. Today, we are seeing heavy buying of the Yen crosses and Dollar/Yen, but a lower Eur/Usd. Meanwhile, global equities are higher. We find it somewhat strange to see a lower Eur/Usd in the face of what otherwise appears to be a market content on buying back into risk. Surely at some point something has got to give. Either the Yen crosses will once again sell back off as the Euro turns lower against an attractive flight to safety USD, or Eur/Usd will begin to rally. In either case we see additional upside to Usd/Jpy as limited. If the Eur/Usd rate starts to plunge, the implication will be that investors are scared and exiting their higher yielding positions which should ultimately weigh on Usd/Jpy somewhat. If Eur/Usd starts to rally however, this will spark some broad based USD selling which at a minimum will stall Usd/Jpy gains. While we recognize that the USD has become the currency of choice in the current market environment, with even the Yen selling off of late, we would not completely abandon the lure of the Yen in risk averse markets. More Details...........
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