USD/JPY to experience more pullbacks
|The bearish perspective around USD/JPY remains unaltered for now despite the ongoing bounce from recent 4-month lows at 104.20. Nonetheless, a move to 2020 lows around 101.20 looks unlikely for the time being as oversold conditions support the technical rebound, FXStreet's Pablo Piovano reports.
Key quotes
“Dollar weakness and lower US yields followed the historic slump in the US economic activity in the second quarter along with the protracted deterioration in the US labour market and the unabated advance of the pandemic. If we add political jitters plus the omnipresent US-China effervescence, the continuation of the sell-off in the pair appears more than justified.”
“Despite the prevailing offered bias and the likelihood of extra pullbacks, USD/JPY is unlikely to recede to the area of 2020 lows around 101.20, at least in the short-term horizon. For this scenario to materialize it would be needed a sharp worsening of macro conditions, which looks improbable at the moment.”
“Further out, the current oversold condition of the USD/JPY pair calls for the continuation of the technical rebound to, initially, the lower bound of the May-July range in the 106.00 neighbourhood.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.