We see no respite from USD/JPY bears. The major has hit fresh 15-month lows. Yen ignores dovish talk, remains solidly bid.
Price action is holding above the 106 level with scope for further downside.
The pair was faded recovery attempts on Thursday on heightening fears of a hard landing in the US economy.
Moreover, Japanese Finance Minister Aso talked down the need for FX intervention yesterday.
Aso reiterated that there is no change in Govt stance to respond to fx moves and the govt is not conducting forex policy with specific levels in mind.
Markets ignore governor Kuroda's attempts to jawbone the Yen today by stating the BOJ is no situation to offer (QQE) exit plan.
Technical studies highly bearish. Price has breached major trendline support at 106.50 and has slipped below 61.8% Fib.
Support levels - 105.55 (May 2016 low), 105, 104.27 (141% Fib extension of 107.318 to 114.737 rally)
Resistance levels - 106.80 (1H 55-EMA), 107, 107.15 (5-DMA)
Call update: Our previous call (https://www.econotimes.com/FxWirePro-USD-JPY-slumps-to-3-year-lows-holds-above-107-handle-break-below-to-see-further-weakness-1149514) has hit all targets.
Recommendation: Good to go short on rallies around 106.20/30, SL: 106.80, TP: 106/ 105.55/ 105.
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