FxWirePro: Yen remains trapped in Bull/Bear fight

After reaching our anticipated target of 1 per dollar,  https://www.econotimes.com/FxWirePro-Call-Review-With-risk-aversion-fading-Bears-might-push-yen-to-111-per-dollar-in-short-term-1257697  the Japanese yen has strengthened to 109.7 per dollar despite a stronger dollar amid risk aversion stemming from trade tensions, European political turmoil (showdown between Italy and Brussels over immigration and austerity), tensions within German Chancellor Angela Merkel’s ruling coalition, and as equities slide.

Looking at some of the above-mentioned developments, in early June, https://www.econotimes.com/FxWirePro-Yen-might-strengthen-to-1045-against-USD-thanks-to-risk-aversion-and-weak-dollar-1349749 we called on our readers to go short in USD/JPY at the then current rate of 109.8 per dollar with a target of 104.5 per dollar and the stop loss around 111.5 area.

However, our latest calculation suggests that the yen remain trapped in a bull/bear fight and at this point, we can’t predict with certainty that which side would prevail. While the above mentioned bearish factors are working magic for the yen bulls, weakness is stemming from the continued dovish monetary policy of the Bank of Japan (BoJ), stronger dollar, and rising interest rate spread between JPY and USD, which is hovering around 265 basis points.

While yen bulls are aiming for our forecasted target of 104.5 per dollar, the bears are eyeing 114 per USD. The yen is currently trading at 109.8 per dollar.