Robert Rennie, Head of FM Strategy at Westpac, suggests that the price action of USD/JPY pair since the highs suggests that we are in the early stages of rolling over and while we remain above 110.80/ 111.20, we remain in a technical uptrend.

Key Quotes                  

“Base case for us is that we start to roll over and break down through those levels through the end of this week.”

“Next week’s FOMC decision plus ‘dots’ and other associated material will be the near term critical drivers for $/¥. However given Rich’s view over that “It wouldn’t be a surprise if the number of dots for no hikes this year jumps significantly from two”, we have to view strength into 112 as a sell opportunity, with stops above 112.50.”

“Thus we shift our 1 week bias to sell, though maintain neutral 1 month and hang onto a buy on a 3 month basis.”

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