What the easiest thing to do .is not always the right thing to do.. when trading.. since 90% of the people loose... there is a reason behind why 90% of them loose..because most would like to do what is the least scariest in their eyes.
Either usd/jpy catches up with other pairs or the other pairs catch up with usd/jpy. Given the profit taking potential of the trades with significant moves in the pairs, it seems as if the other pairs want to catch up to usd/jpy.
The gbp/jpy pair has strong relative strength, either gbp comes down or jpy rallies, and price action seems to confirm that jpy doesn't want to rally. That means gbp comes down with some retracement in gbp/jpy.
Last week, usd/jpy wasn't behaving as it should or as other pairs were behaving. I had to take small profits or get out quickly from short side of the trade. It feels there is a large bidder in the market, with standing orders over time versus one large order, some stealth buying. This correlates with the ten year government USD/ note strength, virtually no retracements even when gold was heading higher. So, it seems that there is some stealth usd strength, with bonds being bought. It seems to be originating from Japanese central bank. Paulson, favors USD strength from what I can gather. Equities should head back down, as the week unfolds.
Either way look for profit taking next week with USD strength bias..
all this implies that usd/jpy is buffered from drawdowns by being hinged to the gbp/jpy trade.. if usd/jpy is taken down, gbp/usd has to rally even more to preserve gbp/jpy relative strength.
