JPY and GBP losing steam against the USD – BBH

Research Team at BBH notes that the last session was the first since February that the US dollar remained above JPY114.00 and in fact, it made a new 10-month high near JPY115.30.

Key Quotes

“The JPY115.60 area corresponds to a 61.8% retracement of the dollar's decline since reaching almost JPY126 in June 2015.  Above there is initial potential toward JPY116.00-JPY116.20.  The technical indicators have not confirmed the new dollar highs, but the momentum is strong.  Initial support is seen near JPY114.50.”

“While the yen was the weakest currency last week, shedding almost 1.5%, sterling was just behind it with a 1.25% decline.   Sterling snapped a two-week advance.  Disappointing data, broad dollar strength, and the UK parliament's support for the government's timetable of triggering Article 50 took a toll.  Early in the week, sterling had reached $1.2775, its highest level since just before the flash crash, but just shy of the 100-day moving average (~$1.2795).   It has not traded above that moving average since the referendum.  The $1.25 area offers initial support, and a break could see $1.24 in short order.   A break of $1.23 would likely signal the end of the two-month correction.  The RSI has turned down.  The MACDs and Slow Stochastics may rollover near week.”