My current thoughts.

Today's trade is still in play. If I wasn't already in the market, I would be comfortable with a JPY short trade. Especially if another 1hr swing forms. Most likely against the USD, but I think the JPY is shortable against anything at the moment due to its correlation with global bond yields (particularly the US 10year).

Yields are rising because the 'market' had priced in more rate cuts this year but is now unwinding those bets. But even though it's deemed that worldwide interest rates won't rise anymore, and in fact will be coming down soon. At the same time, enough people are in employment to ensure that economies remain strong.

Why does the JPY suffer in this environment? Because japan still has negative interest rates, therefore owning another currency is more appealing.

So if I wasn't in the market already I'd be looking for short JPY trades, the risk to any trade would be profit taking ahead of NFP. And the caveat to any trade is that I would close it out before NFP due to not wanting to hold any risk as NFP is reported. Although I think it could create a potential trading opportunity after the event. At the moment the numbers are released you often see 'whipsaw' which could randomly stop out any ongoing trades.

My next post will be my thoughts on the NFP release. Enjoy your evening 🙂