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16 Jun 2015
USD/JPY needs to hold 121.85/05 to maintain uptrend – Westpac
FXStreet (Barcelona) - The Westpac Team shares the key risks for USD/JPY, and further believe that 122.50/123 support might hold the losses for the pair for another week, but the pair needs to maintain above 121.85/05 to stay in the uptrend.
Key Quotes
“Macro: Last week we stuck with a ¥ sell bias, but voiced our concern that we were nervous about Japanese officials’ potential comments on the weak yen. However, we did not expect to see Kuroda’s name on the list of officials voicing some concern over the currency. Our sense of what he said is that he has been misinterpreted on a real versus nominal basis, which Kuroda confirmed in parliament on Tuesday. We have the two day BoJ meeting ending Friday, though the main driver of USD/JPY will be the FOMC meeting. As we argued last week, the low end of the range should be 122.50/123 and we maintain our bias for another week.”
“Model: The long USD surprise index mean reversion signal encourages the model to open a moderate sized 5.2% JPY short for the week ahead.”
“Technical: Medium term USD/JPY uptrend has been placed on hold by a weekly reversal signal, typical of previous interim tops. 121.85/05 must hold to maintain the uptrend.”
Key Quotes
“Macro: Last week we stuck with a ¥ sell bias, but voiced our concern that we were nervous about Japanese officials’ potential comments on the weak yen. However, we did not expect to see Kuroda’s name on the list of officials voicing some concern over the currency. Our sense of what he said is that he has been misinterpreted on a real versus nominal basis, which Kuroda confirmed in parliament on Tuesday. We have the two day BoJ meeting ending Friday, though the main driver of USD/JPY will be the FOMC meeting. As we argued last week, the low end of the range should be 122.50/123 and we maintain our bias for another week.”
“Model: The long USD surprise index mean reversion signal encourages the model to open a moderate sized 5.2% JPY short for the week ahead.”
“Technical: Medium term USD/JPY uptrend has been placed on hold by a weekly reversal signal, typical of previous interim tops. 121.85/05 must hold to maintain the uptrend.”