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Short USD/JPY Positions Noted But Rate Not Looking Convinced

JPY
MNI (London)
  • Reports IMM and leveraged names have increased short USD/JPY positions.
  • One major bank has also recommended a short USD/JPY as its trade of the week (RBC) noting that local investors in Japan are continuing to repatriate overseas investments to buy JGBs, looking for opportunities to sell back into any USD/JPY rally.
  • Having said this Asian traders have suggested that Japanese retail investors expect to emerge on the bid at and below Y104.30.
  • Support seen at Monday's low at Y104.36 ahead of Y104.13(61.8% Y103.18-105.68) ahead of the Sep21 low of Y104.00. Resistance Y104.70, stronger Y105.00-20.
  • MNI Techs: USDJPY is still correcting the Nov 9 strong rally. The outlook remains bullish however. In candle terms, the Nov 9 price pattern is a bullish engulfing line signalling a potential reversal. A break of 105.65, Nov 9 high, briefly probed last week, would reinforce the bullish set-up and signal scope for a climb towards the 100-dma at 105.79 and the early October highs of 106.11. Initial support is seen at 104.14, a Fibonacci retracement level.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com

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