The yen enjoys safe haven flows and the USD will probably not enjoy a hawkish Fed.These are the main reasons for going short on Dollar/yen. Here are more reasons:
Here is their view, courtesy of eFXnews:
Currency investors should consider selling USD/JPY this week, advises Barclays Capital in its weekly FX pick to clients.
“We recommend short USDJPY because we believe the FOMC is unlikely to provide much support for the USD, while BoJ inaction this week could result in some yen appreciation pressure again, particularly in light of downside risk arising from the EU Referendum. We expect USDJPY at end-Q2 at 105 in the “Remain” scenario, while looking for a sharp decline towards 97 in the “Leave” scenario, as global risk aversion would likely intensify in reaction to the result.
From a technical perspective, we are overall bearish for USDJPY and would prefer to use any short-term upticks as an opportunity to sell at better levels. The recent key reversal weeks signal selling interest ahead of resistance in the 112.50/113.15 area. Our longer-term bearish view is intact while price is below the 116.15 former range lows from August 2015. A move below support in the 105.50 area would encourage our bearish view towards our targets in the 100.70 area,” Barclays projects.
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