The close below the daily cloud in USD/JPY (albeit marginally) and Nikkei suggests that better levels to buy these markets are likely in store. For the time being, we are wary of turning optimistic given the lack of strong basing signs and an ongoing choppy downtrend from the May peaks in USD/JPY. AUD/USD is also one of the latest victims of USD profit taking, though given a Bullish Reversal Day in AUD/CHF and favourable back-test statistics (Figure 3) we prefer expressing the AUD bounce risk via this cross.
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Barclays