BofAML Warns USDJPY Trend Has Turned

Tyler Durden's picture


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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Mon, 01/13/2014 - 13:28 | 4327589 Gromit
Gromit's picture

I'll take the other side of that trade.

Mon, 01/13/2014 - 13:35 | 4327604 Cult_of_Reason
Cult_of_Reason's picture

It's a free country.

You're free to do whatever you want, no matter how stupid it is.

Everyone and his mother, and even idiots like Gartman, are on the same side of overcrowded short JPY train.

Mon, 01/13/2014 - 13:36 | 4327624 LawsofPhysics
LawsofPhysics's picture

So, Japan is to be sacraficed then?  I thought that there was distinct order to these dominoes damnit.

Mon, 01/13/2014 - 13:43 | 4327631 Cult_of_Reason
Mon, 01/13/2014 - 13:47 | 4327654 LawsofPhysics
LawsofPhysics's picture

Soon to be what the commuter trains into the Bay Area and Los Angeles look like. - "winning"

Mon, 01/13/2014 - 14:12 | 4327669 Cult_of_Reason
Cult_of_Reason's picture

"Short JPY" is Gartman's 2014 "number one trade of the year" ... in pie-in-the-sky terms.

Enough said...

Mon, 01/13/2014 - 13:30 | 4327598 LawsofPhysics
LawsofPhysics's picture


How's Abe feel about that?  BofA?  Yeah, do the opposite...

Mon, 01/13/2014 - 13:55 | 4327678 GotNuttin'todo
GotNuttin'todo's picture

Things swing. Wait for the Yen to recover to 97-98 Yen to the dollar, then go short. What's the rush? Put in your stops at 94-96 Yen to the dollar depending on your risk level. I agree - the Yen is toast. Lots of time to play this one out.

Mon, 01/13/2014 - 13:37 | 4327626 max2205
max2205's picture

Tyler....why are you bugging us with ML poop

Mon, 01/13/2014 - 13:50 | 4327657 Atomizer
Atomizer's picture

Some idiotic government worker posted back to me last week, DXY is meaningless.

Mon, 01/13/2014 - 13:56 | 4327681 Papasmurf
Papasmurf's picture

Cup and handle.

Mon, 01/13/2014 - 13:47 | 4327659 konputa
konputa's picture

So back to 99.70 before lift off to 125?

Mon, 01/13/2014 - 13:59 | 4327695 GotNuttin'todo
GotNuttin'todo's picture

Eveyone has their own numbers and their own stops, but at least you got the direction right long term.

Mon, 01/13/2014 - 13:50 | 4327665 GotNuttin'todo
GotNuttin'todo's picture

Now I get it!! This turning thing is unique to the USD/JPY. I thought markets went forever in one direction. What a dorky article.

Mon, 01/13/2014 - 14:32 | 4327807 fijisailor
fijisailor's picture

Comparing the USD to the JPY is like comparing a Cream Soda to a Root Beer when what you really want is a shot of Jack Daniels.

Mon, 01/13/2014 - 14:41 | 4327838 ImpliedVol
ImpliedVol's picture

Where is Stolper when you need him?

Mon, 01/13/2014 - 15:29 | 4328003 Colonel Klink
Colonel Klink's picture

I wouldn't listen to Bankruptcy of America More Looting if they told me the dollar's purchasing power was dying.  I'll be happy to come to my own conclusions based on my lying eyes instead of a corrupt major bank.

Tue, 01/14/2014 - 03:09 | 4329945 Cdn1
Cdn1's picture

BofAML's Macneil Curry is another technical analyst who is often wrong. Is there no info available from other BAC analysts on these markets?

Thu, 01/23/2014 - 10:24 | 4358637 Rodders75
Rodders75's picture

Why are JGBs bid today?


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