It's been quite a while since I took the time to update this so I think it's about time that I share my thoughts.
The past few months have been favorable for most long term strategy FX investors (myself included) with events and momentum largely favoring macro fundamentals. I'm sure the BoJ QE increase came as a shock to many, but to me it is just the beginning of a long awaited move that I believe will stretch much further. I still hold long USD/JPY and have held that position for most of the year. With a Positive roll, the largest QE scheme in history (of developed countries....), and a BoJ lineup that would make Keynes look Austrian, there is no reason to be anything but short yen, even at the current cocaine-induced rates hitting 115.00. Pick your buying opportunities but in the long term I think this is still going much higher. The only real decision is choosing the most favorable pair to invest in: usd/jpy, eur/jpy, gbp/jpy, aud/jpy ect. I like USD now, but the fed will see increasing pressure to bring back limited QE going into early 2015, and I see it as an almost near certainty by the end of 2015.
On other trade setups and ideas, short EUR/GBP has been in an almost perfect technical decline since May. I expect the euro to continue seeing downward pressure and it is largely one of the front runners in the great "Race to the Bottom" most major currency pairs are tangled up in.
As an alternate trade idea, EUR/CHF is approaching the key 1.20 mark. We know the SNB has the button are ready to buy at 1.20 to sustain this minimum rate. They have confirmed it in comments in recent weeks and have not wavered from this position for years, so is a buy EUR/CHF in order? Monetary policy is a dangerous thing to mess with, but if you want to play with fire it could be a good bet. The question is how far are they willing to go to maintain the rate, since the euro is clearly dropping like a stone.
