Once again rating companies are aggressively criticizing government deficits. This time around Fitch Ratings admonished UK, calling for faster debt reduction and cuts in government spending. No rating cut has been threatened, yet, but the outlook is not favorable. Currency markets didn’t like it and punished the Pound. Well, maybe not “punished”, but GBP sold off on the news. It may have looked bad, because not that much else happened, but no important supports have been broken. So far, it seems like a correction after few decent days that the Pound had before. We need to see if there is a continuation tomorrow.

Most of the Japanese Yen pairs had a range-bound day, without significant moves either way. Nice conditions for traders using 5M or 15M charts, making for active day. Hourly charts show largely sideways action, with breakouts possible on both sides of the market. I still have a bearish bias, like my sell order in CAD-JPY, but a possibility of an upside price swing must be given at least some consideration.

On this hourly chart of NZD-JPY, new sell order is set at 59.82, targeting 59.00. Buy above the 61.60 high is a possibility, if the price gets there, but is not automatic. I need to see how the action unfolds. Besides, other Yen crosses might be better candidates for going long. As mentioned before, my bias is bearish and since Kiwi-Yen is about the weakest of these crosses, it makes more sense to look for selling opportunities here.

Mike K.