Saxo Bank

Fixed Income hitting on the lows. Will be see the stock markets getting scared of the higher yields again? EURUSD likely to test the previous highs at 1.3680 soon.

What's going on?
* A rather positive release of the Japanese Machine Orders led to a continued sell-off in JGB’s. Other bonds are also about to hit new lows.
* Asian shares are rallying with Nikkei about to make new highs. S&P500 also likely to test 1536-38 in the next couple of days, but we believe it will be rejected.
* EURUSD to test the previous high at 1.3680 today or tomorrow. EURJPY still on its way to 1.74 within the next 3 months.
* Data today: Most important is the UK PPI figures and US Consumer Credit later tonight.

Strategy:
EURUSD
Support : 1.3665, Resistance : 1.3680
The pair made a strong reversal on Friday and we expect a follow through today. We consider EUR to be the safest bet, buying Friday's highs at 1.3641 bid, stop offer at 1.3626, targeting resistence

GBPJPY
Support : 246.70, Resistance : 251.00
Buy on dips for a test of 251 (highs from 07/1992). Stop offer at 248.41