26 Aug 2015
Can USD/JPY get above 200MA by this week's close? - BAML
FXStreet (Guatemala) - Analysts at Bank of America Merrill Lynch explained and noted that the Nikkei and USD/JPY are under pressure after Black Monday…
Key Quotes:
"Market interest in Japan has fallen as autumn draws near and as external uncertainty has risen considerably since the PBOC's CNY reforms on 11 August amid heightened prospects for a Fed hike and subsequent market turmoil."
"The uncertainty manifested itself as a sharp risk-off move on Monday (24 August) when USD/JPY dropped 3.0% in one day or nearly 5% intraday."
We believe this USD/JPY move was a combination of (1) a lack of confidence in policy makers, particularly in Asia, to stabilise growth and the market, (2) the unwinding of carry positions amid heightened uncertainty over the global economy, and (3) pricing out the Fed's September hike."
We believe the lack of announcements by global policy makers to support the market could result in pressure on USD/JPY and the Nikkei 225 index (NKY) near-term at a time when concerns could increase over negative feedback from the equity market sell-off to the real economy."
"On the technical front, USD/JPY and NKY have formed a double top this summer with our technical strategists painting a bearish short-term outlook."
"UD/JPY and NKY may face another dip without substantive policy measures as USD/JPY is retracing from the 24 August intraday bottom on weekly Ichimoku Cloud support."
USD/JPY 200MA is key to BAML
"We will see whether it can successfully close above the key 200 moving average level on a weekly basis, currently running at 120.7, this Friday."
Key Quotes:
"Market interest in Japan has fallen as autumn draws near and as external uncertainty has risen considerably since the PBOC's CNY reforms on 11 August amid heightened prospects for a Fed hike and subsequent market turmoil."
"The uncertainty manifested itself as a sharp risk-off move on Monday (24 August) when USD/JPY dropped 3.0% in one day or nearly 5% intraday."
We believe this USD/JPY move was a combination of (1) a lack of confidence in policy makers, particularly in Asia, to stabilise growth and the market, (2) the unwinding of carry positions amid heightened uncertainty over the global economy, and (3) pricing out the Fed's September hike."
We believe the lack of announcements by global policy makers to support the market could result in pressure on USD/JPY and the Nikkei 225 index (NKY) near-term at a time when concerns could increase over negative feedback from the equity market sell-off to the real economy."
"On the technical front, USD/JPY and NKY have formed a double top this summer with our technical strategists painting a bearish short-term outlook."
"UD/JPY and NKY may face another dip without substantive policy measures as USD/JPY is retracing from the 24 August intraday bottom on weekly Ichimoku Cloud support."
USD/JPY 200MA is key to BAML
"We will see whether it can successfully close above the key 200 moving average level on a weekly basis, currently running at 120.7, this Friday."