USD/JPY: Talk of plenty of bids but I prefer ‘sell rally’ play
There was a lot of talk in the interbank market about the very large bids at 101.35/40 and then last night more talk of big bids 101.50/70. Understandably the spot market took this as a signal to get long again. I don’t agree.
- Risk-aversion is only one headline away;
- Precious metals are telling me that the USD is due for a bearish phase;
- USD/JPY positioning is still quite long;
- Recent price-action favours range-trading if anything.
Overall I prefer to sell rallies towards the top of recent ranges 102.50/70 in expectation of a move to 100.75 at least.