Without any further ado …. We expect the pair may drop again with important support at 104.54-87, and may test lower at 99.02-54 if the support pivot is broken.
On the non-TA:
- Escalating trade tension lead money flow into JPY
- Fed Chair Powell’s speech in Jackson Hole implied series of downside risks but did not mention any measures. The view was seen as leaning to dovish
- Any further BoJ ease will be reactive to ECB/ Fed easing and therefore likely following JPY strength. Moreover, supports to Japanese activity may also stem from upcoming sporting events including the Rugby World Cup and 2020 Olympics. As such, a continuing drop in UST-JGB yield differentials would likely point to a move back to $/JPY 100 or lower
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