This just drifted across the desk, so thought it was worth sharing. I noticed the AUD was coming off towards it’s overnight lows, while at the same time the USD/JPY was approaching it’s overnight high.
Then I see that apparently tensions in the East-China Sea reportedly escalated overnight as Chinese warships have reportedly pointed their missile radar at Japanese military targets. Japanese officials described the situation as “possibly dangerousâ€.
So the natural trades would include selling JPY as well as AUD, which explains the moves in those currencies.
I am not, repeat not predicting any military action in that neck of the woods but we all know when rumors start, currencies react. Any risk off trading of those two currencies, (JPY and AUD), could result in positive moves higher in EUR and CAD, and to a lesser extent the USD, especially against JPY.
Further reading: EURUSD Update II: Bearish Reversal- Respect the Price Action (Elliott Wave)USD/JPY was approaching it’s overnight high
