My USD/JPY position poked up through the aforementioned stop in my last post but I didn't have any entry orders in to take advantage and re-open a sell order. Since then its been oscillating a bit and I re-assert that USD/JPY in the short term is a sell above 124 with a key point of resistance being 124.5, so i'm sticking to my guns and selling at the upper ranges of the oscillation as opportunities permit. It should be noted that in the long term USD/JPY fundamentals remain bullish as the Japanese economic policy continues the attempt to stop an immovable object (deflation) with an unstoppable train (inflationary economic policy).
As far as open positions go, I'm holding short NZD/USD and EUR/GBP. Both of these trades are fundamentally driven and i'm looking to hold them for the medium to long term. Current expectations aside, there is a very chilling reason why we can rest assured that being short NZD is a wise decision in the long run. It is not that we necessarily expect them to cut interest rates, it is merely that they can. Their rate (3.25%) is much higher than any other major central banks', and very importantly more than 125 basis points higher than Australia's rate. New Zealand is without a doubt losing the currency war among major central banks and the pressure is increasingly on for them to get back in the race to the bottom. This has been the driver behind the current downtrend and I would expect it to continue until other major central banks begin to reverse policy and a balance returns to the force, so to speak.
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