USD/JPY on the move to 102.50
|The continuation of the flattening US yield curve will weigh heavily on the USD in the coming days. Soggy GDP data, increasing virus cases, and the absence of a Senate approval to pass an extension of the emergency jobless will do no favors for the greenback. Furthermore, Fed Powell has confirmed, yet again, they will "do what it takes" to get the economy moving again. Rates increases in the medium to long term are a pipe dream.
When trading trends we like to buy the stronger currencies and sell the weaker. As the chart below shows the USD (green line) is by far the weakest currency. The JPY (brown line) shows a currency gaining momentum confirming the bias to sell this USDJPY. A break of structural support at the 106 handle confirms the path of least resistance is lower. 103 50 is the next meaning full support but we see a push even lower to 102.50 zone. Fading rallies with stops above 106.00.
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