USD/JPY: Downside risk now very real
I’ve thought for weeks that USD/JPY is likely to stop everyone out in extended periods of volatile range trading and I think we may now see the bulls getting hurt. The market is long of the JPY crosses and the delayed taper from the Fed will hurt the bullish USD sentiment. Add in to the mix that it’s mid-July and many big players will start exiting their positions pre-holidays and we could be in for a sharp downside clean-out. I would not be surprised to see the market back below 95 quite soon.