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GBPJPY Big Trade 09.23.2015 +75
Close GBP/JPY at market here currently 184.35 +75 on trade
Order to Buy 1 Lot USD/JPY at 183.60
Place Order to Buy 1 Lot USD/JPY at 183.60
Pending Order to Buy 1 More Lot at 181.70
Stop for ALL at 179.70
The decline in U.S. equities this morning has taken many of the major currencies lower and we are hoping that the pullback will be extensive enough for us to reestablish our long dollar and short yen trades. While the market was disappointed by the Federal Reserve’s decision to leave rates unchanged, recent comments from U.S. officials indicate that most policymakers are still planning for a rate hike this year. We have been looking for USD/JPY to pullback and use that opportunity to reload our long dollar positions. There are no major U.S. economic reports this week but a recovery in USD/JPY could be driven by Japanese data.
Japanese markets are closed until Thursday but when they open, Japan is expected to report that core inflation fell below zero for the first time since April 2013. Between this “bad news” and S&P’s recent downgrade of Japan, a further slide in the Yen is likely. For this reason, we like SELLING JPY versus the USD and GBP. If the Fed maintains its view that rates will rise this year, the market will also maintain its view that the BoE could raise rates in early 2016. Hawkish comments from UK policymakers in the face of weaker data indicates that policymakers are are open to the idea.