USD/JPY: Trend and momentum signals remain bearish -  Scotiabank

Eric Theoret, Strategist at Scotiabank notes that USD/JPY holds a neutral to bearish perspective, and a break below 100.95 would shift the focus to the 100.00 area.

Key Quotes

“JPY is consolidating at the upper end of its recent range through thin local trading (local Mountain Day holiday). Yield spreads are steady, and measures of JPY volatility are showing signs of stabilization following their post-Brexit decline.”

“Risk reversals suggest a slight increase in the premium for protection against JPY strength, and media rumors are hinting to the potential for disappointment at the BoJ’s September meeting as the policymakers’ assessment (announced in conjunction with the July stimulus) is said to endorse the existing policy path.”

“USD/JPY short-term technicals: neutral-bearish—USD/JPY has yet to break the August 2nd candle range 100.68-102.83. Trend and momentum signals are bearish, and short-term MA’s are bearishly aligned. A break of the range low would shift the focus to the July 11 open at 100.43 followed by 100.”