JPY continues to strengthen as overnight, the technical support level at 107.25 was taken out in USD/JPY and both USD/JPY and EUR/JPY are trading lower this morning, notes Senior Analyst, Piet P.H. Christiansen at Danske Bank.
“Price action suggests that the break lower in USD/JPY is technically driven on the back of general USD weakness with lots of short JPY positions exposed to the sell-off. In the short term, the strong momentum and stretched short JPY positioning suggest that further downside could be in store for USD/JPY. Look out for a reaction from the Bank of Japan. We are currently reviewing our USD/JPY forecast.”
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