Feb 29th 2016: Dollar On Back Foot

• This morning, the US Dollar is giving back some of Friday’s gains as investors switch back to the yen.

• The pound and euro are making reasonable gains after heavy selling on Friday, but so far these moves appear tentative.

• The big winner is the Japanese yen, with the yen pairs set to test the February lows.

• The Australian and New Zealand dollar are lagging however, with the NZD/ USD gapping lower at the open after severe selling on Friday.

Coming up today: 

• Coming up today we have German retail sales at 07.00.
• This is followed by UK net lending to individuals at 09.30.
• European CPI flash estimate follows at 10.00.
• Canadian current account data is released at 13.30, alongside RMPI.
• Chicago PMI is released at 14.45, with pending home sales at 15.00.

Trade Idea: 

• The GBP/ JPY is on the back foot again this morning, extending the recent losing run. Upside is likely to limited until the result of the ‘Brexit’ referendum, making a LOWER trade attractive.

• A good way to play this is a LOWER trade predicting that the GBP/ JPY closes below 155.00 in 10 days for a potential return of 185%.

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