Yen’s Rally Run Out of Steam - Rabobank
Piotr Matys, EM FX Strategist at Rabobank, suggests that the Japanese
shares posted strong gains with the Nikkei up 1.13% after the yen’s
rally run out of steam following the longest stream of daily gains so
far this year.
Key Quotes
“It seems that
the JPY’s bulls, who further increased their bets against the US dollar
to 98,130 contracts in the week ending April 5 according to the weekly
data provided by Commodity Futures Trading Commission, decided to take
some profits after the currency appreciated to the highest level since
October 2014.
Indeed, technical momentum indicators imply that
USD/JPY has reached an oversold territory with the RSI falling below the
key 30 threshold. On the last two occasions when the RSI was this low
(in early January and in the middle of February), USD/JPY managed to
trim its losses.
In other words, there is a risk of a corrective
rebound in USD/JPY with stronger than expected US data scheduled this
week as a potential trigger. That said, USD/JPY would have to rally
beyond the key 111~ pivot (daily lows in February and in the middle of
March) to expect a sustainable recovery.”
(Market News Provided by FXstreet)
