US$Jpy remained heavy into the weekend, with the Jpy in demand due to the possibility of fewer US rate hikes than previously hoped for, and also as a hedge against political risks, and unable to break back above 113.50, the dollar headed steadily lower through the session to finish just above the lows of 112.55. Note that although it has since traded below it, US$Jpy finished under the 100 DMA for the first time since 7 Oct, which may add to the bearish tone at the start of the week.
The 4 hour/daily momentum indicators now seem to be aligning for further losses ahead, and if we break 112.50 there is not really very much to support the dollar until 112.00, and then little again until the February lows at 111.58/68, although they may still be some way off. On the topside, resistance will again be seen at the 100 DMA at 113.05, ahead of Friday’s high although that appears unlikely to be revisited today. Selling rallies, with a SL placed above 113.55 seems to be the plan.
Economic data highlights will include:
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W: Trade Balance, BOJ Minutes, All Industry Activity Index
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F: Foreign Bond/Stocks Investment, Nikkei Flash Mfg PMI
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