The yen is the strongest of the major currencies. It has gained about 0.65% against the dollar. It has been grinding lower throughout the Asian and European session and has remained in narrow ranges near its highs in the US morning. Japan still seems isolated in terms of it desire to intervene. Ahead of the G7 heads of state summit this coming, the risk of intervention remains slight. Asian and European shares were lower, which favors the yen. US yields are flat, while the US 10-year premium has narrow a couple of basis points. As this Great Graphic, from Bloomberg, shows, the dollar’s high before the weekend formed the third point of a trendline connecting the March and April highs. Today’s pullback is flirting with the minor uptrend line drawn off the May 3 low near JPY105.50. JPY against USD We had anticipated that previous resistance in the JPY109.40-JPY109.65 would offer initial support. Minor penetration has been recorded, but meaningful upticks remain elusive. A convincing break of JPY109.30 would open the door to a move toward JPY108.65. That corresponds to the 38.2% retracement of the rally from the JPY105.50 low. The 20-day moving average also comes in near there. JPY BGN Curncy Japan reports CPI, retail sales, employment, and industrial output at the end of the week. The CPI is likely to be soft.
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JPY against USDWe had anticipated that previous resistance in the JPY109.40-JPY109.65 would offer initial support. Minor penetration has been recorded, but meaningful upticks remain elusive. A convincing break of JPY109.30 would open the door to a move toward JPY108.65. That corresponds to the 38.2% retracement of the rally from the JPY105.50 low. The 20-day moving average also comes in near there. |