USD/JPY outlook August 19th: Conflicting forces at play but bear-strategy favoured
- Big players remain very long of USD/JPY;
- Crosses are mixed with AUD/JPY and GBP/JPY looking bullish but EUR/JPY and CAD/JPY running into quite heavy selling interest;
- Higher US yields should be favouring USD/JPY bulls but the fact that it can’t maintain rallies, despite the Fed/BoJ policies, is a damning bearish indicator;
- Big option plays should ensure tight-ish range trading over coming weeks;
- Positioning, price-action, and Chinese selling, suggests to me that selling rallies is the better strategy here.