The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
USD/JPY eyes ¥103
The move back above the 200-day moving average in USD/JPY seems to confirm the idea that this currency pair is minded to hit ¥103 once again, a major hurdle since the beginning of May.
Any close above this area would put ¥104 back in focus, and with the Bank of Japan probably facing some more declining economic growth the advantage still lies with the US dollar.
At some point, it would be pleasant to see USD/JPY break from its current trading range, which at the moment is defined by ¥101- ¥103. Apart from two spikes above ¥103 in March and April, the range has remained intact since the beginning of February.
With geopolitical tensions easing, safe haven demand for the yen has abated, while the prospect of more quantitative easing from the Bank of Japan will leave the yen looking less attractive.
The move higher in the daily RSI gives the impression that this move has legs, meaning that traders should keep a close eye on ¥103. The turn higher in the weekly stochastic momentum indicator is another sign that there is strength behind the current price action, giving preference to long positions.