USD/JPY: Targeting a drop to around 146.25 in the next 1-2 weeks – Scotiabank
|The JPY is the top performer on the day. Economists at Scotiabank analyze Yen’s outlook.
A minor reversal has formed on the daily chart
Japanese stocks hit a fresh 33-year high briefly earlier before retreating but JPY gains are more reflective of the lower US yield outlook as well as positioning.
Friday’s CFTC data showed a large rise in net speculative JPY shorts through last Tuesday’s week (amid generally better net buying of the USD); net short JPY positions held by speculative, hedge fund and real money traders rose to the largest in close to a year – just as the JPY was starting to show some signs of steadying near recent lows.
Daily chart patterns suggest a minor reversal (double top pattern) has formed on the daily chart, targeting a drop to around 146.25 in the next 1-2 weeks. That could squeeze some of the weaker JPY shorts further.
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