Bank of America Merrill Lynch FX Strategy Research still expects the USD/JPY to rise into year-end but the top-heavy market may persist for now as tensions over US politics and the North Korean situation may deepen into September.
"Our technical analysis sees potential downside into 106.52
Under such a scenario, Japanese investors are likely to provide mild but insufficient support while exporters can increase hedging as USD/JPY gets closer to their assumption level, which stood at 108.3 for the fiscal year in the June Tankan survey," BofAML argues.\
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In line with this view, BofAML targets EUR/USD at 111 by the end of September and at 115 by the end of the year.