=> Here we are isolating the Yen once more and expecting a worsening outlook of US assets to continue which will raise the prospect of asset repatriation out of the US.
Whilst risk may be rebounding temporarily as the FED attempts a dovish shift, and US-China trade tensions are likely to continue de-escalating, USDJPY will still like remain on offer amid broader USD weakness.
Here we also expect the rebound in risk sentiment to be temporary rather than fixed, meaning JPY will see some inflows. If Japanese banks tighten conditions further we will have a greater incentive for real money to reduce their exposure in the US.
The only risk here is if risk on sentiment stays supported and the US macro outlook improves.
For those interested in more details on the "flash crash" please see our previous USDJPY weekly chart!
Good luck and all the best for those invested in the US.
Comment
⋅
First targets here 108...with some help from risk it's within reach next week.
whithin reach in a couple of minutes at this rate ...
InvestingScope
⋅
Thanks. Even from a Channel Down perspective (on 1D), we have a sell signal currently:
lapin_eliott
⋅
as you mention yourself, expecting equities worsening and risks the very same day they announce a deal for shutdown and that trade talk are going well is extremely uncalculated risk...
ridethepig
⋅
@lapin_eliott, US Equities do not have much room left to the upside, the pantomime with China is de-escalating but the damage to the economy has already been done.