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FOREX: USDJPY 100 Pips Off Overnight Highs, Bearish Threat Remains

FOREX
BulletMarketsForeign Exchange Bullets
  • JPY resilience standing out on Monday as we approach the NY crossover, and USDJPY extends its pullback from the overnight highs to around 100 pips, back below 155.00. Price action is likely reflective of Japan being relatively well insulated to tariff rhetoric, but also its historical safe haven status gaining traction across the European session amid the broad weakness for major equity indices consolidating.
  • The Jan 27 move down for USDJPY highlighted a bearish technical threat and significantly, initial firm resistance has remained intact at 156.75, the Jan 23 high. Overall, the pair has breached the 50-day EMA and a trendline drawn from the Sep 16 ‘24 low, signalling scope for a move towards 152.55, a Fibonacci retracement point.
  • With the USD index remaining around 1% in the green, yen strength is most notable in the crosses. Perhaps the clearest barometers of global risk sentiment, it is notable that AUDJPY (-1.23%) has dipped through the December lows at 95.50 and NZDJPY (-1.52%) stands out, having pushed to a near six-month low below 0.8600. For both crosses, the early August carry unwind lows remain the clear medium-term targets.
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  • JPY resilience standing out on Monday as we approach the NY crossover, and USDJPY extends its pullback from the overnight highs to around 100 pips, back below 155.00. Price action is likely reflective of Japan being relatively well insulated to tariff rhetoric, but also its historical safe haven status gaining traction across the European session amid the broad weakness for major equity indices consolidating.
  • The Jan 27 move down for USDJPY highlighted a bearish technical threat and significantly, initial firm resistance has remained intact at 156.75, the Jan 23 high. Overall, the pair has breached the 50-day EMA and a trendline drawn from the Sep 16 ‘24 low, signalling scope for a move towards 152.55, a Fibonacci retracement point.
  • With the USD index remaining around 1% in the green, yen strength is most notable in the crosses. Perhaps the clearest barometers of global risk sentiment, it is notable that AUDJPY (-1.23%) has dipped through the December lows at 95.50 and NZDJPY (-1.52%) stands out, having pushed to a near six-month low below 0.8600. For both crosses, the early August carry unwind lows remain the clear medium-term targets.