Some Tactical Plays In A 'Trendless' FX Market
With that in mind, it would not be surprising if today saw slightly trendless FX markets. As long as USD/JPY holds above 111.50, it looks fine.
As long as WTI crude prices are just meandering around with a centre of gravity at USD 53/bbl, it’s only a matter of time before USD/CAD breaks 1.30 and short EUR/CAD looks like an attractive 2-month trade.
ECB meetings will be a lot more exciting after the French elections when better data and higher inflation put more urgency into calls for more tapering, and really place the focus on what the implications of that would be for the Euro and for peripheral bond markets. We would like to be long EUR/JPY before this debate really hears up, but would also like to get the trade on at 115 or lower...