Risk aversion was a prominent theme to start the week, but the theme didn't cut far beneath the surface. Where equities tumbled, yen crosses were little changed. This may have been in part due to uncertainty surrounding the BoJ rate decision. Yet, with that event past and the central bank unwilling to increase its stimulus - which is an indirect devaluation method for the yen - these pairs are at risk should any technical breaks occur.
In evaluating the yen crosses, there are few that I like for the less momentous upside scenario (there are always mutiple scenarios). A NZDJPY bounce from a rising trendline from February's swing low would be a first step confirmed by a break above 90. I prefer the downside for these crosses though should continued risk aversion take advantage of the BoJ's 'hands off' move. Though higher yielding, the AUDJPY and CADJPY patterns still look particularly exposed. I like them below 95.25 and 93.50 respectively - but I'd prefer the latter between them.
Pairs like EURJPY and USDJPY offer opportunities of their own, but they are more stalwart and thereby less likely to fold to early risk pressures. I'll consider these pairs when we get closer to their bigger levels (169 and 101).
Ahead, the pound pairs may be put to the test with a round of UK data. If BoE rate hopes truly give, I like GBPUSD below 1.6550, but GBPCAD may be a better candidate having already taken out 1.8300 range support and pushing an 8-month trendline at 1.8150.
Speaking of the loonie, my USDCAD long is under pressure as the pair is leaning heavily on 2014's range support around 1.0965. If it makes a serious break lower, I will cut the position.
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