Analysts at TD Securities suggest that with the market mood in a fragile state and uncertainty over the horizon still a dominant feature of market psychology, it may take a whole lot more than a solid payrolls report to reverse sentiment in a meaningful fashion.
Key Quotes
“As such, we think the market reaction as far as FX is concerned is asymmetric, in that a disappointment on the release will fuel an Armageddon confirmation bias while a positive surprise may be shrugged off. The JPY will remain very much in focus for this release. Here, we expect $JPY to be a sell on rallies with 108.70 marking a notable resistance marker and 105 as formidable support.”
“We expect this pair to remain heavy in the coming weeks as equity repatriation into the domestic investor base has gathered momentum into fiscal year-end.”
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