Japan returns today after yesterdays’ holiday and ahead of golden week which starts on Monday. They will have missed the 500 pip rally in EUR/JPY and I expect tham to be buyers rather than sellers. Most of the non-committed longs were forced out earlier in the week and now it’s the turn of the shorts to be squeezed.
EUR/USD looks like it’s going higher. It hasn’t really reacted to more swine flu news and whilst there will be pullbacks, I feel that the market is short and about to get squeezed. AUD/USD took out the DNT option at .7300 overnight and is also now trading above it’s 200-day MA. The next technical target there is the major 38.2% retracement level at .7465.
Good luck today.