Dollar Rallies Despite Payroll Miss

Morning Report: 06.30 London

• This morning, the dollar index is holding recent gains made despite Non-Farm Payroll data coming in well below expectations at +160k. The dollar’s apparent strength may be as much to do with the yen taking its foot off the gas as the USD/JPY continues its slow but steady rally.

• Other yen pairs are following suit with the AUD/JPY outperforming after heavy losses on Friday.

• The yen pairs are generally steady, with the euro showing some relative strength, especially against the pound.                                                                                     

                                                                     
Coming up today:

• We have a relatively quiet day ahead with German factory orders at 07.00.

• Then at 08.30, we have Halifax HPI.

• We also have Eurogroup meetings running throughout the day.

Trade Idea:

• One feature of extreme yen moves recently is that they are often reversed within a short period of time.

• The USD/JPY gains in May have been slow, but there’s still scope for further USD/JPY upside from here given recent trends.

                     

A good way to play this is a HIGHER trade predicting that the USD/JPY will close above 108 in 14 days for a potential return of 115%.

                          
                                                         

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