Strong moves against the safe haven currencies
You only need to look at the stock market futures to see why the markets are pushing against the safe haven currencies such as the JPY and CHF, and this may explain some of the softness seen in the USD seen today as the greenback also attracts buyers during times of stress and a flight to safety.
After the strong Chinese trade data and reports that the US and Japan are also going to discuss trade, stock markets have received a fresh boost, and looking at the S&P futures markets, we can see that the leading Wall Street index looks set to open above the 2900 mark when NY cash markets open in a couple of hours.
This has led to gains in spot and cross JPY, with the USD rate back testing the resistance seen ahead of and into 112.00. Stops are noted above here, but only a clean break of 112.35 will likely see moves extended, beyond which we are looking at the 113.00-30 zone.
EUR/JPY has also torn higher and is now eyeing a move on 127.00, accompanied by GBP/JPY which is now trading in the upper half of the 146.00's.
However, given that China's data has been a key contributor to today's price action, AUD is proving to be a strong performer and the spot rate has now reversed all of its losses from yesterday and is now making new highs on the week.
AUD/JPY has been pushed above 80.00 as a result and is posting fresh levels not seen since mid-Dec last year.
It is all risk on at the moment, but we are fast approaching earnings season, with a number US banks reporting today, so watch out for any impact on stocks, as FX markets are clearly taking their lead from this at the moment.