BofAML Warns USDJPY Trend Has Turned
USDJPY's medium-term trend has turned from bullish to bearish. BofAML's Macneil Curry warns that the break of the old May highs suggest weakness should extend further with the 200-day moving avarege at 99.71 as a minimum downside target. Given the JPY's weighting in the USD Index basket, this does not have specific bearish USD implications but does have significant effect on equities as the JPY carry trade comes under pressure.
Via BofAML's Macneil Curry,
$/¥ turns trend, but the US $, in general, is still bullish
$/¥ has turned medium term trend. The break of the old May highs at 103.74 has completed a 3 week Head and Shoulders Top, targeting 102.07/102.30, but weakness should extend much further. The completed 5 wave advance from the Feb'12 lows says we should expect minimum downside targets to the 200d at 99.71, and eventually the Jun'13/Apr'13 lows at 93.79/92.57 before greater signs of stabilization and a resumption of the LONG TERM uptrend towards 124/147 (to be fine-tuned).
However, the $/¥ story does not have broader implications for the US $.
Treasuries roll bullish, but how far can they go?
US Treasuries continue to rally following Friday's bullish reversals across the curve. In the very near term, 10yr yields may hold 2.827%/2.823% area resistance, but as long as 2.935% support remains intact, the risks remain to the downside in yield. KEY RESISTANCE IS SEEN AT 2.792%.
Through here says that we have undergone a medium term bullish turn in trend, exposing the larger, multi-month range lows between 2.544%/2.468%.
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