USD/JPY: risk should remain centered on the broader market tone  - Scotiabank

This week’s JPY risk should remain centered on the broader market tone as we note the absence of high-level domestic data, said Eric Theoret, analyst at Scotiabank, who notes that technicals remain neutral to bearish.

Key Quotes

“JPY is flat, trading quietly in a tight range, unfazed by the release of softer than expected GDP data for Q2 (flat vs. 0.2% Q/Q expected). This week’s JPY risk should remain centered on the broader market tone as we note the absence of high-level domestic data. Wednesday’s trade may provide for some turbulence. Investors remain bullish JPY and investors have added to gross long JPY positions in 7 of the past 10 weeks.”

“USDJPY short-term technicals: neutral-bearish—USDJPY has yet to break the August 2 range 100.68 to 102.83. Momentum indicators are moderately bearish, DMI’s are in agreement, and short-term MA’s are providing confirmation. A downside break should see a decline toward the July 11 open at 100.43, followed by 100 and the June 24 low around 99.”