Yen crosses keep ascending

29 June, 2017

The yen is coming under pressure across-the-board, with the 0% yielding yen converting back to the funding currency of choice in the forex market as global stock markets rally. USDJPY is up by a relatively muted 0.3%, making six-week high at 112.64, while EURJPY and GBPJPY are showing gains of over 0.7% presently. AUDJPY and CADJPY are showing gains of 0.3%-0.4% presently.

Japanese data today featured sub-forecast retail sales data, consistent with the yen weakening theme, but having little discernible market impact at the time of release. Meanwhile, Japan releases CPI data tomorrow, which is expected to reveal ongoing sluggishness in Japan’s inflation backdrop, consistent with no change in BoJ accommodation for quite some time yet. The closely followed Tokyo core CPI for June is projected at 0.1% y/y, unchanged from May’s rate.

Hence by noticing this weakness and by anticipating that the U.S. Fed’s moderately-paced tightening program, I decided to take some intraday and Daily Long positions in several yen crosses, having in mind that tightening program will keep these pairs underpinned. Long intraday positions were taken in CADJPY, GBPJPY and USDJPY.

The GBPJPY in the 4 hour chart extends its upper Bollinger band and makes also higher upper Fractals. Entry was taken at 146.03 with targets at 147.00 and 147.60. Support was set at 144.30.

The CADJPY posted new high for the last 3 months in the daily chart. In the 4-hour chart Parabolic SAR remains positive. Entry was taken at 86.36 with Daily targets at 87.00 and 88.30. Support was set at 83.50. Intraday Target was also taken at 86.80 and Support at 85.00.

Lastly, for USDJPY an intraday entry was taken at 112.41  with hourly target at 112.90. Support was set at 111.20.

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