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21 Dec 2015
USD/JPY: looking for a sustained break above 121.50 - Scotiabank
FXStreet (Guatemala) - Eric Theoret, CFA, CMT FX Strategist at Scotiabank explained that CFTC data (for the week ended Dec 15) detailed a remarkable $4.2bn narrowing in the net short JPY position to $2.7bn, leaving those remaining JPY bears vulnerable in the aftermath of the BoJ-driven turbulence.
Key Quotes:
"The positioning adjustments have left USD/JPY well below levels implied by 2Y yield spreads (bottom chart). We look to upside risk and the potential for a rally toward 123.50.
USD/JPY short-term technicals: neutral, risk of gains—momentum indicators are modestly bearish, the trend signals are remarkably neutral, and USD/JPY is consolidating just below a cluster of medium-term MA’s (100 day MA near 121.50 and 50 day MA at 121.80). Support is expected and 121.00, and we look to a sustained break of 121.50 and the potential for a rally above 123.00."
Key Quotes:
"The positioning adjustments have left USD/JPY well below levels implied by 2Y yield spreads (bottom chart). We look to upside risk and the potential for a rally toward 123.50.
USD/JPY short-term technicals: neutral, risk of gains—momentum indicators are modestly bearish, the trend signals are remarkably neutral, and USD/JPY is consolidating just below a cluster of medium-term MA’s (100 day MA near 121.50 and 50 day MA at 121.80). Support is expected and 121.00, and we look to a sustained break of 121.50 and the potential for a rally above 123.00."