Meet The New Regime: Welcome AUDJPY, Goodbye EURJPY
Europe is now irrelevant, at least according to FX traders, and, well, everyone else. The gyration of the Euro currency, previously moving the market tick for tick, now exists purely in its own vacuum, as more and more hedge fund will unwind and outright liquidate positions. In order not to be caught facing some multi-billion macro fund with its pants down as it faces massive massive margin calls, the ever declining population of market participants has decided to shift the market signal to the AUDJPY, the last bastion of the carry trade. Anyone tracking the FX-ES trade will now need to recalibrate their models to be driven of the Aussie-Yen, and to completely disregard or materially mute inputs coming out of a bankrupt Europe.
AUDJPY - add:
EURJPY - fade: