USDJPY & USDCAD taking its lead

Almost every analyst & trader have been expecting prices to move higher along with the US treasury yields before the end of the QE2 as the Federal Reserve allows it to expire by June 2011. True enough in an ideal situation in anticipating a higher US dollar move against the major pairs. Today's highlight have been more on the USDJPY not because of this reason, but more on the reaction and influential movements of the cross rates particularly the GBPJPY, AUDJPY & the EURJPY.
With price comparison between the majors and cross rates almost all daily chart formations have signaled a friendlier upward direction which has given a much needed relief recovery for the majors after the recent downward movement of the past weeks. While these corrective price movements may seem to be sustaining in today's trading sessions, other traders may still find some reluctance to take a speculative position in the market. Nevertheless, as most traders have been eyeing a short on rally for the Euro & British Pound for that matter. These has been the general sentiments amongst traders and dealer recommending analyst seen in their blogs and market review.

The current month for May and the succeeding weeks of trading would be more of a corrective move from the down turn of prices with a subtantial wider range of price fluctuation. What this all means is that any particular recovery would be a relief recovery and would eventually end up with some consolidation patterns towards the end of the month for May. Although, this would be good for swing and day traders with smaller increments to take from the market. The daily fluctuations between the three major markets would more likely give and take its individual gains and losses even before and after the BOE & the FOMC minutes of their meetings within this week. However, we do have to see how the USDJPY may lead the forex market with its current showing even before the 1st Qtr. release of Japan's GDP.

USDJPY is currently at the 81.58 after registering a high at 81.79 initially. Meanwhile, on the technical front the 4hour chart formation of the USDJPY already did provide the price reversal signal at the 80.75 mid-price levels after consolidating within the Ichimoku Senkao span cloud and a cross over occurred on its way higher and above the 81.05/10 levels. These are the typical incremental movements that we are referring to unless a build-up of momentum and a considerable increase of daily fresh volumes established in the financial futures in line with the current spot & futures market correlation.
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