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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
JPY
Where could USD/JPY go from here?
- Analyst consensus sees the pair at 130.80 - 131.20 over a one-month horizon, but these estimates are looking increasingly stale in light of this week's moves, with downside risks building fast.
- Evidence is building of sizeable downside interest in USD/JPY via options. Across DTCC-tracked trade, close to $2 in USD/JPY put notional traded for every $1 in call notional, with short-dated downside the preferred trade. Strikes at 128.00, 127.00 and 125.00 were unsurprisingly popular, although decent downside interest was noted as low as 105.00, a relatively cheaper strike that would pick up interest on any further break lower.
Figure 1: Formation of Death Cross is first since COVID
- USDJPY's break of support at 129.52 yesterday was significant. The move also hastened the swift formation of a death cross (50-dma < 200-dma) for the first time since 2020. This sequence highlights the clear downtrend, making further weakness likely. The focus going forward is on 127.53, the May 31, 2022 low.
- Significantly, this week's downtick is yet to trigger any technically oversold signals, with the 14-day RSI holding above levels that would suggest momentum has gone too far.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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