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USDJPY: Candles Suggest Recovery Ahead


akats

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Strategy: Flat

USDJPY put in a Hammer candlestick above support at 76.14, hinting a bounce is ahead. We are not keen to get involved however as prices hover near levels where Japanese authorities have previously intervened. Although a long position would be complimentary to any intervention efforts, the markets’ tendency to test policymakers’ resolve suggests we may see speculators attempt a run at the late October low at 75.56 and it is far from clear that the Ministry of Finance would necessarily step in and if so, where. As such, we will stand aside for now. A recovery from here sees initial resistance at 76.58.

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