Today’s Trading Plan for 07.12.2017 – EURJPY

*Good morning/afternoon everyone!*

Today is the day that we have been waiting for all week. Fed Chair Janet Yellen testifies to Congress beginning 8:30 AM NY / 12:30 GMT / 10:30 PM AEST and thats followed by the Bank of Canada’s “rate hike” at 10AM NY Time / 14:00 GMT / 12:00AM AEST. The U.S. dollar has been hit hard in overnight trade but we think there could be a relief rally before Yellen speaks and have recommended a small USD/JPY buy trade to take advantage of the move. Our stop is at 113.07 but we could exit the trade prematurely if it drops to 113.20 and we’ll definitely close the trade before 8:30 NY Time.

Stronger than expected job growth and a mild uptick in average weekly earnings ex bonuses helped to lift GBP. We still see the currency as a sell on rallies but the volatility in the market today is too high to take a preemptive trade. With that in mind, we would love to buy EUR/GBP between 0.8870-0.8880.

Although the Bank of Canada is widely expected to raise interest rates, we haven’t seen any additional USD/CAD weakness ahead of the big event. This tells us that the 25bp hike has been fully discounted by the market and the only thing that matters right now is Governor Poloz’s guidance. We’ll be Live Trading beginning at 9:30AM NY Time / 13:30 GMT to cover Yellen and BoC (daily webinar link)

EUR/USD didn’t make it to 1.15 overnight but it should only be a matter of time before the currency pair tests that level. The slide in the USD has driven AUD and NZD higher this morning with the move in AUD supported by stronger consumer confidence.

*The MAIN THEMES I see today are*

+USD
+CAD
+EUR
-GBP
-NZD

*Trading Biases*
These will could change after Yellen

+USD, +EUR, +CAD, +CHF
-GBP, -NZD
neutral JPY, AUD

*Today’s Potential Ideas*

Just one pre-Yellen, rest will be in LIVE Trading

1. Buy EURJPY at market now 130.05, Stop at 129.55, Target 130.35

Cancel ALL pending orders by 3:30PM NY / 19:30 GMT / 5:30AM AEST
Close ALL open day trades by 4PM NY / 20 GMT / 6AM AEST

*We have just one trade pre-Yellen, rest will be in LIVE Trading*

Swing

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