We have just sold USDJPY at the current spot 112.68 (stop 113.68) target 111.68.

We think that professional forex traders, options barrier traders and famous bank will sell USDJPY near 112.95. So 113 it will be a very good resistance.

After losing ground to the US dollar yesterday in the wake of the Bank of Canada’s subsequently mixed statements, the loonie regained strength during overnight trading on a rebound in crude oil prices. With no economic releases coming out of the country today, trading in the underlying currency is being left to move with the morning’s releases from the United States and movements in the commodities markets.
With renewed concern over the oil supply in the United States going into the high-demand summer travel season, oil prices have rebounded back above $70 per barrel this morning helping to push up the value of the Canadian dollar. The currency did falter with the release of the highest GDP growth in 2.5 years in the United States, but has since continued to strengthen as markets react to the fact that the figures from the Unites States did come in lower than expected. The USD/CAD pair is trading mid-morning at C$1.1090, a gain of over 100 pips from last night’s level.

The stock markets in Canada are up for the morning. The S&P/TSX is up 1 percent, trading at C$11,536.5 as the bounce back of commodity prices and strong results from the National Bank of Canada allowed for a jump of more than 100 points at the open of the markets, allowing the index to recover yesterday’s losses. Energy stocks are leading the push upwards in the markets with a 1.7 percent jump. Certicom Corp, a data security company, saw a 16.5 percent rise in its share price to C$6.00 as GE’s security business announced that it licensed Certicom’s elliptic curve cryptography technology. Drug company Isotechnika Inc. also saw a jump as it announced that it signed an agreement with US company Lux Biosciences Inc. to grant them worldwide rights to develop and commercialize Isotechnika’s leading drug which treats ophthalmic diseases. The stock price rose 14.12 percent to trade at C$1.94 mid morning.

Bond prices strengthened this morning as lower than expected growth and consumption in the United States cast some doubt on whether the Fed could continue raising rates. The 10 year bond was up C$0.08, priced at $101.50 yielding 4.298 percent.

we have closed our long USDJPY at 112.90 (with 175 pips of profit)

There is a split in the market regarding today”s BOC rate announcement. Usually the market has made its mind up on the actually rate news and tends to focus more on the accompanying statement. Today is different, and the rate outlook is not clear. Some see the BOC hiking for the seventh straight month with a 1/4-point move while others are suggesting the bank will hold off raising rates today. Given this uncertainty a tightening conclusion to today”s meeting could boost the Loonie and drive USD/CAD back towards the recent lows around 1.1125.
On the flip side, a pause in the hiking cycle could push USD/CAD clear through the key 1.1280 resistance point. Until the rate news is known the commodity market influence will be put on hold.
USD/CAD has been on an upward path since basing at 1.0975 on May 9 but stalling at 1.1280, a fibo level, has cast doubts over the bull run and today”s rate news could be pivotal for the big dollar recovery.

we have bought USDJPY at 111.15 (stop 110.75) target 112.9 (or 111.70 or upper 113)

We are waiting for a rollback in USDJPY. We will provide our recommendation later.
Right now all currency in HOLD.

USD/JPY jumped from the 110.95 level to 111.25 in early Sydney trading before moving back down again to where it started. Specs seem to be keen on hunting for more stops to the upside. Stops were a major factor in the move up overnight from a low of 108.97 in London. They helped fuel the move up. Higher than expected CPI data out of both the U.S. and Europe, along with higher overseas bond yields, provided the catalysts for the surge in both USD/JPY and EUR/JPY overnight. European official warnings over the effects of a recently stronger Euro helped support USD across the board as well. USD/JPY is likely consolidate gains made overnight. The rise in USD/JPY is likely to spur on some more Japanese exporter hedging, especially from the overnight high of 111.35. Selling is likely to be seen ahead as well, though to what extent is uncertain at this time. Support below is eyed around 110.80, 110.50 and the 110.00-20 area, all levels were stops were seen on the way up overnight. USD/JPY currently trades 111.00/03.

Australasian traders are taking note of an article in the Sydney Morning Herald this morning, warning on the risk to the market of hedge funds and forex. The column warns that hedge fund holdings are now over $800 bln and five times more than the hedge fund investments at the time of the LTCM crisis. The column also warns about the “silly” price rises in copper and other metals comparing the commodity “bubble” to the internet “bubble”. The report from Alan Kohler also notes that the Journal of Commerce industrial gauge is 53% and a sharper rise than that seen in any other recovery. Concluding, the column warns of further weakness in the USD as well as a commodities correction. USD/JPY trades at 109.66 while EUR holds 1.2860 into the afternoon.