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JPY Sinks, Nears Multi-Decade Trendline

FOREX
  • Despite the absence of US markets Monday, price action has been on the busy side, with particular focus on UK assets. A series of comments from MPC member Saunders - one of the more hawkish members of the board - who endorsed market pricing bringing forward expectations for a BoE policy rate hike, warning households to prepare for for a "significantly earlier" rate rise. This helped GBP outperform against most others in G10, with EUR/GBP within range of the year's lows at 0.8450.
  • JPY, on the other hand, is underperforming notably, boosting USD/JPY to the best levels of the year, touching Y113.00 in the process. This puts the pair on course to test a multi-year trendline at Y113.41, drawn off the December 1975 high. A break here would strengthen both the S/T and M/T bullish trend conditions.
  • With US out for Columbus Day, data and risk events thin out from here, with markets narrowing in on the beginning of quarterly earnings season which kicks off later this week.

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