11 Jun 2013
Flash: Underlying Yen trend attempting to get back on track - JPMorgan
FXstreet.com (Barcelona) - The enormous volatility that hit the USD/JPY last week, leading to a violation of several critical support levels, is not enough indication to turn bullish on the Yen, says Niall O'Connor, currency strategist at JPMorgan.
While some may think the sharp decline from last week may have substantially increased the risks that a bearish phase in USD/JPY might be underway, the overstretched retracement does not change the mid term JPY bearish view, says O'Connor.
In turn, "We are looking for signs that the underlying bear trend is resuming, and in this regard, the postpayrolls lift for USD/JPY and crosses suggests an increased risk that the underlying trends are attempting to get back on track" added O'Connor.
In view of the strategist, a key test of buyer's convictions comes at 98.70/98.85 resistance area, precisely the area where the pair finds itself as the lines are written, and that includes the breakdown area over the past week.
While some may think the sharp decline from last week may have substantially increased the risks that a bearish phase in USD/JPY might be underway, the overstretched retracement does not change the mid term JPY bearish view, says O'Connor.
In turn, "We are looking for signs that the underlying bear trend is resuming, and in this regard, the postpayrolls lift for USD/JPY and crosses suggests an increased risk that the underlying trends are attempting to get back on track" added O'Connor.
In view of the strategist, a key test of buyer's convictions comes at 98.70/98.85 resistance area, precisely the area where the pair finds itself as the lines are written, and that includes the breakdown area over the past week.