FxWirePro: Yen strengthens to highest since French election
Source: FxWire Pro - Commentary / 06 Jun 2017 09:04:50 Eastern Standard Time
The safe haven currency Japanese yen strengthened to the strongest level since the first round of the French election back in April when the winning of the independent centrist candidate Emmanuel Macron beating Front National Leader Marine Le Pen led to a major slide in the yen. The renewed selloff in the oil price leading to weaker inflation expectations and slower rate hikes from the US Federal Reserve coupled with a weaker than expected earnings growth in Japan in the first quarter have strengthened the Yen past the important resistance around 110 per dollar.
We at FxWirePro stand by our May’s recommendation to long the yen against the dollar targeting 101 per dollar. In that article, named, “FxWirePro: Buy yen at dips targeting 101 per dollar” available at http://www.econotimes.com/ we recommended, “…….buying the yen at dips against the dollar with a target around 101 per dollar. Proffered buying areas are here at 112 (10 percent of the total intended position), then at 114 (20 percent of the total intended position), then at 115 (60 percent of the total intended position) and finally at 116.5 (10 percent of the total intended position). We would recommend stop loss after entering fully into the trade.”
However, the yen didn’t weaken to as low as 115 per dollar but around 114.3 per dollar. So in a separate analysis, named, “FxWirePro Call Review: Maintain USD/JPY short; stop loss recommended”, we added, “As per our guideline, our readers couldn’t have entered the entire desired positions. We recommended at this point maintaining the entered positions and add fresh positions at breakouts. An addition of fresh short positions is recommended one the pair break below 110. As of now, we would like to recommend a bigger stop loss around 115.5 per dollar.”
We expect the yen to remain upbeat against the dollar, heading into the UK election this week and FOMC rate decision next week.© FxWire Pro 2018. All rights reserved. The FxWire Pro content received through this service is the intellectual property of FxWire Pro or its third party suppliers. Republication or redistribution of content provided by FxWire Pro is expressly prohibited without the prior written consent of FxWire Pro, except for personal and non-commercial use. Neither FxWire Pro nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon.