USD/JPY: Path of least resistance appears to be higher for now - Westpac

Sandeep Kanihama FXStreet Contributor

Robert Rennie, Research Analyst at Westpac, suggests that they remain torn between positive US$ fundamentals on the one hand and the potential for all out trade war/ increased EM volatility on the other, but they have noted for many weeks that even in the midst of a significant deterioration in China/ US/ EU trade relations, USD/JPY could not break below 109.50.

Key Quotes

“Wednesday’s price action was even more bizarre with USD/JPY breaking above 111.50. Thus the path of least resistance appears to be higher for now, though we remain concerned that next week’s ‘section 232’ auto hearings could shift ¥ sentiment.”

“Thus, we stick with a ‘trade wars warrants caution’ near term view but more positive bias medium term.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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