EURJPY shorts on Global Macro expectations The reasons that back my case are simple.
First of all, we need to take into consideration that Yen is a high risk off asset, with yen longs taking place whenever there is a big uncertainty in the world, or a black swan event unfolding.
If you believe that a big crisis is yet about to be seen then you need to consider shorting EURJPY , I personally do for the reasons below.
Yen Long Factors
-New Governor UEDA taking head and within the next meeting of 28th of April along with market expectations Yen is expected to appreciate on expectations that the bank will widen the Yield curve band or even
will take it off. Any positive tone on Interest rates will be considered at the meeting as well.
-Sharp decreases in headline inflation such as the one from 6 down to 5% are signs of a big incoming crisis. Usually, when we run into recession, inflation is drastically moving to the downside, this drugs US Yields lower on expectations for more rate cuts taking place from FED this year.
-U.S. NFIB Small Business Optimism showing a bleak picture. Even though this indicator is considered a 1-star indicator from calendar news, it is the omen of the US unemployment rates and Jobless claims climbing up while US NFP and Jolts data moving lower. So on the aggregate, it is the first sign before US Labor data start showing a very bad picture.
EUR Short Factors
-EUR Large Speculators are overbought on EUR across the board and this shows that if and when they are about to unfold their positions we are going to see a big short playing on EURO , it just needs a big catalyst to take place for them to follow through.
