FXWW News/JPY crosses/Trade Ideas

EUR/JPY: Shorts favoured but still need to respect important support levels

  • Weekend win in Japanese regional elections by opposition parties will worry Yen shorts;
  • Overall positioning still running at extreme levels;
  • The topping formation which we started watching last week is still looking very plausible;
  • Support levels will be firm starting at 140.50 but a break back below 140.00 could be critical on a number of levels (technical, psychological, and positioning).
  1. There was a mayoral election in the far south islands of Okinawa, where a US military base has been an issue. I think the results were 20,000 to the winner, 10,000 to the loser (roughly speaking).

    However, unfortunately for the Okinawans, I believe their views aren’t that representative of mainland Japanese, who are more concerned about the economy and social issues. So I don’t see any impact to Abe’s overall popularity. Pick your favourite JPY cross and buy the dip, is my view.

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