Yeah I know I’m talking my book but if I didn’t, no one else would. As Lilac pointed out yesterday morning, GBP/JPY is at a very interesting level on the long term charts and if the trend line continues to hold, we could be in for some significant moves lower (chart to come). Sterling lost ground overnight, the JPY was the biggest gainer and the EUR and AUD stayed where they were despite some intraday volatility. Now it remains to be seen whether this was a one-day wonder or the start of something beautiful!
The risk during the Asian morning session is for more JPY crosss selling. I think that interbank dealers will be setting themselves with short AUD, NZD and GBP/JPY positions during the morning. If no fresh corporate or real money selling appears in early Tokyo, then we’ll see these positions get squared up.
Good luck today.