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Yen in Demand After ECB Shock08 March 2019 by Dave Evans

Morning Report: 07.00 London

This morning, markets are in full risk-off mode, with traders flocking to the perceived safety of the Japanese yen. This comes after an unexpectedly dovish ECB meeting which pointed to slow growth and rates holding until 2020.

The USD/JPY has hit reverse gear this morning, falling to 111.00 from 112.00 just four days ago. Other yen pairs are struggling, with the GBP/JPY down for the fifth straight day, selling as quickly as it rallied in late February. The AUD/JPY is slumping below support at 78.00.

The big loser has been the EUR/JPY which continues to suffer following yesterday’s ECB meeting that saw the pair drop to 125.00 and now 124.50. The euro is also recovering a little against other currencies though, with the EUR/USD slightly higher this morning after significant losses yesterday that saw the pair drop to 1.1200 yesterday. The EUR/GBP is unchanged after yesterday’s sell-off and holding above 0.8550.

The dollar index is at the 2018 highs as traders seek out safe havens. The AUD/USD continues to slide and is holding just above the 0.7000 level. The GBP/USD dropped just below 1.3100 with small gains this morning.

The USD/CAD continues to gain, trading above the 1.3450 level. The USD/CHF is slipping back after advancing above 1.0100 yesterday.

Coming up today

Today’s main ticket is US Non Farm Payrolls at 13.30, released alongside the unemployment rate and building permits. US average hourly earnings are at the same time.

Also at 13.30, we have Canadian employment change and unemployment rate.

Trade Idea

The EUR/JPY is struggling in the face of yen dominance and shock euro weakness. There is plenty of room for further downside.

Yen in Demand After ECB Shock

A good way to play this is a LOWER trade predicting that the EUR/JPY will close below 124.00 in 14 days for a potential return of 176%.

Yen in Demand After ECB Shock