Good morning,
The "buying the dip strategy" in the EUR has not been working the last couple of days and as a result I have been taken out of my long position during New York hours. As per my comments, I felt it was trading heavily, but I was stubborn to think that shadow buying by Reserve Managers would be sufficient enough to hold it above the @1.3840-50 support.
During Asian hours, Australia reported slightly weaker that expected economic figures and the currency sold off (analysts will certainly now tell you that they don't expect a hike by the RBA next week..). Interestingly enough, USDJPY also went up, going further away of the 80.00 big figure so widely publicized for its options barriers. This upmove might certainly be more attributed to the fall in the 10 Y futures, since their correlation is enormous.
By the end of the week, we have month end that might generate some volatility and distortions until the fixings and next week, we are all waiting for the outcome of the (in)famous FOMC meeting and results of US Senate elections. It will be key to the next directions markets will take.
In the meantime, let's see what the day brings us.
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