Long EUR/JPY@103.80. Stop at 103.00. Take profit 105.30
US stocks showed a key reversal pattern last Friday ( Bullish Hammer) on the back of falling concern of a fiscal cliff thanks to a comment (BOEHNER SAYS MEETING WITH PRESIDENT WAS CONSTRUCTIVE, OUTLINED A FRAMEWORK FOR TAXES, SPENDING). Risk-sentiment looks to be improving ( our gram+ is now at risk-neutral out of risk-averse today). I am likely to use this timing as an opportunity to go long X.JPY as RISK ON trade and I prefer long EUR/JPY from here as it looks to be lagging other X/JPY. AUD/USD/CAD outperforming by 1.5% vs EUR outperforming by 0.3% against JPY this month. We have the Eurogroup meeting to discuss bailout funds to Greece later today, so I place my stop at a bit far away than usual in preparation for headline risks around the meeting. In addition, USD/JPY market isn’t longer than yesterday as the market had expected some dips to 80’s through the BoJ meeting and trimmed some longs, so I think the topside is lighter than before. EUR/JPY is breaking 1.5 y downtrend, the next level will be 105.30 ( 38.2% fibo).
NOMURA