Thoughts From Fxcm
Yen Outlook
04:50 GMT July 25 USD/JPY, EUR/JPY and other JPY pairs sold off en masse in early Tokyo trading. USD/JPY fell from 120.33 through stops below 120.00 to a low of 119.80 before bouncing later on the back of Japanese dip-buying and on short-covering by intra-day specs. EUR/JPY traded similarly, trading down from 166.32 through stops below 165.85 to as low as 165.38. It too bounced strongly from its lows on the back of Japanese demand and short-covering interest. Buy stops set just above 166.00 look to have been taken out in the process. More volatility in these two pairs is seen going forward. Despite the bounces, both remain biased down with dealers looking for more retracement down over the next session or two amidst general JPY buy-backs. JPY was especially bought back heavily against Latin American currencies overnight, including MXN and BRL. AUD/JPY opened in Asia bid on the back of good buys from a large Japanese investment bank below 106.00. From 106.43 however, the cross sold off, trading down to 105.41 in tandem with JPY buys elsewhere before bouncing back to opening levels. The story was the same in NZD/JPY which traded between 96.00-86. (hi)
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Yen Outlook
04:50 GMT July 25 USD/JPY, EUR/JPY and other JPY pairs sold off en masse in early Tokyo trading. USD/JPY fell from 120.33 through stops below 120.00 to a low of 119.80 before bouncing later on the back of Japanese dip-buying and on short-covering by intra-day specs. EUR/JPY traded similarly, trading down from 166.32 through stops below 165.85 to as low as 165.38. It too bounced strongly from its lows on the back of Japanese demand and short-covering interest. Buy stops set just above 166.00 look to have been taken out in the process. More volatility in these two pairs is seen going forward. Despite the bounces, both remain biased down with dealers looking for more retracement down over the next session or two amidst general JPY buy-backs. JPY was especially bought back heavily against Latin American currencies overnight, including MXN and BRL. AUD/JPY opened in Asia bid on the back of good buys from a large Japanese investment bank below 106.00. From 106.43 however, the cross sold off, trading down to 105.41 in tandem with JPY buys elsewhere before bouncing back to opening levels. The story was the same in NZD/JPY which traded between 96.00-86. (hi)
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