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Buy USD/JPY with target at 112.75 - Westpac
Analysts at Westpac offered a trade plan to buy USD/JPY.
Key Quotes:
"Entry: Buy 100% at 110.15, Stop: 109.30, Target: 112.75
- Rationale:
- As noted above, USD has unwound the bulk of its post-election rally;
- The BoJ has reiterated its commitment to Yield Curve Control and stated that a soft JPY is supportive for their inflation targeting;
- Risk appetite has not been materially impacted and solid global growth prospects remain in place;
- Positioning unwinding into month and quarter end should provide opportunities to re-establish JPY shorts;
- Key risk is that the House Freedom Caucus might try to leverage the debt ceiling and government shutdown risks to achieve their policy goals;
- Yet another example of Republican party dysfunction would damage risk appetite and generate yet more doubts about Trump stimulus but that is not a story for markets until mid-April, just before the continuing resolution runs out 28 April.
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
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