Few interesting Forex fundamentals hit the wires today. Not of primary importance, nonetheless worth noting. Japan reported first  annual trade deficit in 29 years for the 12 months through March. This is big news for a country almost absolutely dependent on exports. Shipments of both electronics and autos in March plunged 45.6 percent from a year earlier to $42.4 billion, though the fall wasn’t as severe as February’s 49.4 percent decline. Shipments of cars and car parts to the U.S. and Europe remained weak, and exports of semiconductor components to Asia also declined, though the fall in exports to America moderated. Some see it as a sign of bottoming out, but for me it is another abysmal month, without any practical improvement. Yen took it in stride and largely retained gains from earlier this week.
Meanwhile in Australia, much to everybody’s surprise, average core inflation rose by 1.1% , exceeding expectations of 0.8%. This suggests that Reserve Bank of Australia might put a stop to aggressive cuts in official interest rates, with current level at 3%. I think it is a little too early to say that, but last week UK also indicated higher inflation, contrary to common perception. If we get more readings like that from around the world, by the end of the year central banks might be bumping rates, not cutting them. That’s very speculative at the moment, but certainly possible. Something economists have been warning for a while. If that happens, carry trade might be back in vogue, with Yen probably once again being on the receiving side of things.
Back to current time. In the Real cost of bailouts I described a trade in EUR-GBP. Well, Pound took another another round of beating to day, and the trade finally happened. Price moved above the buy point.

Entry was at 0.8921 and my objective was to be 0.9000. Well, I decided to get out about half an hour ago, exit happened to be at 0.8982 for 62 pips. It is time when daily trends have tendencies to exhaust themselves and when I get done. Being close enough to target, I’m content with the outcome and see no reason to try to hold out for the last few pips. If they happen.
Currently I’m looking at hourly chart of CAD-CHF.

This pair went through a sharp sell off, on this time frame, couple of days ago. I think there is one more leg down in this move, so a sell order was placed at 0.9322. Considering that preceding slide was rather large, in relation to this chart, I don’t expect too much now. Objective is 100 pips, but I’m flexible. It will largely depend on the way price moves.
Yen has been in the news a lot and is always of interest to traders, me included. Today’s action is misleading. On some charts it looks as if continuation of the down move is likely. Couple of them, though, are suggesting possible resumption of an up trend. Those would be 1H EUR-JPY and 1H CHF-JPY. Myself, I think I’ll wait for opportunities that are more clear. To me.

Mike K.