Today’s Trading Plan 06.08.2017 – USDJPY and AUDJPY (EUR only after ECB)

*Good morning/afternoon everyone!*

European currencies are in focus this morning with the ECB meeting at 11:45AM and the UK vote throughout the day. The first results will be released around 21 GMT with the election likely to be called around 00:00 -- 1:00 GMT. EUR is trading with a heavy bias ahead of the rate decision against 1.13 as investors worry that Draghi will not be hawkish enough which means a lower inflation forecast and a risk assessment that cites downside risks.

Sterling is rising and falling on the polls. We expect some good 2 way action in pound before the polls close this afternoon. We have a full day before that happens so strap in for a wild ride before and after the election. The recovery in yields has taken USD/JPY above 110 on the confidence that Comey’s testimony won’t be damaging to Trump. We think gains are capped at 110.50 and see 110.40-110.50 as a good place to reestablish short positions.

USD/CAD looks like its finding resistance at 1.35 and could drift back down to 1.3440. AUD is weighed down by last night’s weaker trade report while NZD continues to fly high.

*The MAIN THEMES I see today are*

USD strength vs. JPY and CHF
NZD strength
CAD strength

AUD underperformance vs. NZD
EUR -- theme will emerge after ECB

*Trading Biases*
These will change after US data

+NZD, +CAD, +USD
-JPY
slightly +AUD

have to wait post ECB to trade EUR
marginally +GBP

*Today’s Potential Ideas*

**No view on EUR trades pre-ECB, no view on GBP trades

I like

+USDJPY at 110.05 with a stop at 109.75 aiming for 110.40
+NZDJPY at 79.25, with a stop at 78.75, Target 79.55

Swing

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