Catching The Falling EUR Knife A Winning Strategy?

Mostly a crowded trade and one currency – the yen against everything, have consumed the FX market. Today is another short day of Euro-market moving data, and with no supply to be taken down, investors will be waiting for North American trading antics around their own retail sales and US consumer sentiment for fundamental market guidance to maybe change their already pre-conceived convictions.

There is always a breaking point and at times a bridge too far and today best describes the EUR/JPY pull back or the vanilla yen rally. A healthy trade requires at times some breathing space and by booking profits for whatever reason – JGB's getting slammed, headlines on Cyprus asking for more money or Italy needing to raise +EUR60-billion in more funding – which instigates an "orderly retreat" only proves worth in that overall trade. Even Euro-zone production this morning has not helped the 17 member single currency cause. Despite rising more strongly than expected in February (...