Risk sentiment is this week's focus following the US/British/French attack on Syria, with the USDJPY's tentative breakout beginning to falter as prices head into the Ichimoku Cloud.
Article / 28 July 2016 at 14:07 GMT

FX Board: USD dips, yen traders tremble ahead of BoJ

Head of FX Strategy / Saxo Bank
  • Yen trade to see high volatility around BoJ meeting
  • Support lies at 103.50, 102.50-00 for USDJPY
  • EURSEK trending higher on weak Swedish retail data

Stockholm, Sweden
Tonight's BoJ meeting remains the big story in the FX world, but the SEK is also worth a look as it is sinking against the euro on a poor retail sales print out of Stockholm. Photo: iStock

By John J Hardy

A look at USDJPY ahead of the BoJ meeting

The overhead resistance is quite interesting in USDJPY as the Ichimoku cloud rapidly descends into the session ahead. A post-BoJ rally would quickly cut through the cloud and could suggest a recovery to 110.00 and higher. 

To the downside, the support levels come in around 103.50 and then 102.50/00 before the focus shifts all the way to the lows. Even if we do trade lower, the outlook would remain muddled due to the extent of the recent rally.


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Source: Saxo Bank 

EURSEK (weekly)

EURSEK is on the move higher again today after a weak retail sales number; we have the Q2 GDP data up tomorrow. 

If we had a proper selloff in risk appetite, the upside in this pair could surprise a still-complacent market. In any case, this latest rally is putting the longer-term cyclical highs in focus above 9.600, which are not far away.

Source: Saxo Bank 

— Edited by Michael McKenna

John J Hardy is head of FX strategy at Saxo Bank

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FX Board for Thursday, July 28, 2016


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