Hesitant to Short EUR Into French Elections; Short USD/JPY Preferable

We have been doggedly bearish on the dollar since the start of the year, but we have been avoiding buying the euro for concerns that the coming elections in the Netherlands and particularly France would weigh on it. Recent weakness in the euro due in part to polls suggesting more support for Marine Le Pen, the anti-EU candidate, has justified this caution. However, while she could win the election, our bias is still for her to lose, and so we would be hesitant to instigate short euro positions. ….That said, French fears could continue to weigh on the euro and could spill over to broader risk aversion. Our short USD/JPY view could be one way of capturing this risk as well as capturing our broader bearish dollar view. Another would be to sell EUR/JPY.