Sean Callow, Research Analyst at Westpac, points out that the USD/JPY flickered below 110 on Tuesday, a low since late June, but it bounced sharply off the round number and also 100- and 200-day moving averages on either side of the figure.
Key Quotes
“The yen has seen only modest scale and short-lived episodes of safe haven buying in the broad USD/JPY up trend since March. Short term, markets are likely to lean towards the assumption that the US and China are on track to reach some sort of agreement in time for the November APEC and G20 meetings.”
“This should keep USD/JPY tilting higher multi-week, with a return to 112 likely as the Fed delivers another hike in Sep. But in the week ahead, a period of consolidation on DXY suggests a neutral bias on USD/JPY.”
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