USDJPY: Looked heavy
|Preferred Strategy: As we thought yesterday, US$Jpy looked heavy and has tested the 113.00/10 support which has currently held. While the short term charts still look heavy, the dailies are fairly neutral so a fairly nimble stance is required, but with political concerns coming to the fore, including speculation of a dilution of the US tax plan and the increasing thoughts of the relatively dovish Powell becoming the next Fed chair, further downside momentum would not surprise. In the meantime, today’s BOJ meeting is expected to contain few surprises.
Below 113.00 would see us back in the previous 112/113 range, where 112.75 would be the first level of support ahead of 112.50. On the topside, back above 113.50 would find offers at 113.85 and again at 114.00although this does not look like being bothered today. If wrong, above 114.00, minor resistance will be seen at 114.20/25, above which 114.45/50 is an increasingly strong hurdle to overcome.
Economic data highlights will include:
Japan Unemployment BOJ Interest Rate Decision/Press Conference/Statement, Housing Starts, Construction Orders
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