USDJPY: Topped out already – TDS

By FXStreet FXStreet (Delhi) – Research Team at TDS, notes that the USDJPY has turned lower in recent days after several failed attempts at the end of last year to climb above 124.

Key Quotes

“This validates our view that the 5 June high of 125.86 may represent the top of the powerful 67% rally that started in late 2012. While the long-term prospects for this pair remain uncertain, we think we are due for a further correction in the weeks ahead. Since the start of the rally, the deepest pullback seen has been less than 10% (May-June 2013). Considering the scale of the advance, corrections have been very shallow in recent years. We think USDJPY’s luck is running out.

With the sustained break below 120 this week, we think the next sustained move to the downside may already be underway. We think investors should use any near-term bounce as an entry point to build strategic short positions. An initial target of the 24 August panic low of 116.18 seems achievable, but we think declines can extend further.

Beyond that mark, our next target comes in at 113.34, which represents the 50% retracement level of the final phase of the USDJPY rally (May 2014-June …read more

Source:: FX Street