This text is from blog famous currency strategist Joel Kruger .
HOPE EVERYONE IN NORTHEAST HANGING IN – The hurricane in the US has really taken away from market volatility over the past few sessions, and with markets still closed on Tuesday (and possibly for the remainder of the week), we can expect to see more of the same. Most of the talk on the day has centered around Japan and the latest BOJ rate decision. While the central bank did expand its asset purchases as was widely expected, the fact that this was already priced in, actually resulted in some profit taking on Yen shorts.
Daily forex technical analysis by Joel:
BOJ DISAPPOINTS – Many market participants were also looking for a much more aggressive BOJ, given the state of the local economy and need for ongoing ultra accommodative monetary policy. The disappointment therefore also was seen as a contributing factor to the USD/JPY pullback. Still, ultimately, the outlook for the Yen remains highly bearish, and I continue to forecast a retest of the 2012 highs at 84.20 over the coming weeks. Any setbacks towards 79.00 should be used as a formidable opportunity to build into existing longs, while back over 80.65 should confirm and accelerate.
STRATEGY CENTRAL – On the strategy front, I have gone ahead today and taken some profit just over 1.0000 on my USD/CAD long from 0.9800. While I am still projecting significant upside over the coming weeks back towards 1.0500, I am happy to take some off the table here. I have already highlighted my bullish USD/JPY view above and continue to look for opportunities to be buying EUR/CHF below 1.2100 for a push to 1.2500 over the coming months. Elsewhere, AUD/USD has come back on my radar screen, and I see potential for a fresh short trade ahead should this market push back over 1.0400.
WHERE TO SELL AUSSIE – AUD/USD has been well supported in recent trade, although I feel it really should be tracking lower. While I wouldn’t recommend just selling anywhere, should we see a push back over 1.0400 and towards 1.0450, I very much like the idea of selling. Moving on, I am still a big fan of long EUR/AUD and will be looking to add again on a dip back into the 1.2350-1.2400 area. Finally, for those of you who are trading EUR/USD, I like the idea of selling any rallies above 1.3000 on Tuesday. This is a market that remains under broader downside pressure, and should continue to be very well offered on intraday jumps.