USD/JPY – BULLISH BIAS – (106.80-110.20)
After this week’s FOMC meeting, the USD has strengthened across the board lifting USDJPY to an intra-day high today of 108.96 which is the highest level since the 8th September 2008. The market is now beginning to focus on key resistance at 110.66 which is the highest pre-global financial crisis level from the 15th August 2008. It is likely that speculative long USDJPY have increased significantly in the near-term reaching elevated levels.
We remain wary that increasingly stretched short yen positioning could prompt a relief yen rally if a risk off event triggers an unwind of speculative positioning. However, it is likely that Japanese importers will be buyers of USD/JPY on any dip and sizeable FDI outflows will likely provide support.
BTMU