USD/JPY bearish/neutral short-term — Scotiabank

Eric Theoret, strategist of FX at Scotiabank, pointed out that the outlook of the pair remains tilted toward the neutral side in the short term.

Statements key

«The tone more extensive remains dominant and the risk rises in the face of the French elections this weekend. Reversals of risk have been moderate during the week, softening the material for the protection against the strength of the JPY. The JPY remains vulnerable to the profit-driven in times of risk aversion. Fundamentally, the outlook for JPY remains bearish, and spreads have shown signs of stabilisation after its estrechecimiento recent (with a support of the JPY). The Thursday comments from BoJ Gov. Kuroda kept the expectations of an accommodation exceptional political, without pointing out any changes before the meeting next week».

«The signs of bearish momentum continue softening, the DMIs lowly aligned are fading and the closing Thursday in the USD/JPY was the first above the MA of 9 days from the end of march. The chart this week suggests early signs of a change in the trend with a sequence of minima and maxima, with the high compensation of the Thursday before the short-term resilience in the area of 109.20. The 200-day MA (108.91) remains a key level of support, and we expect earnings to overcoming 109.50 towards 109.80 and 110.50».

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