USD/JPY: Testing The Bottom Of The Trump Range; Whats The Trade? – SocGen

Dollar/yen broke down on political worries[1] and lost the 110 level. Could it extend the drop?

Here is their view, courtesy of eFXnews:

Societe Generale FX Strategy Research notes that the last year can be divided into two ranges for USD/JPY and US 10-year treasuries:

Pre-Trump, USD/JPY traded in a 98-108 range and 10s in a 1.31.8% range. Since mid-November, USD/JPY has traded in a 108-119 range, 10s in a 2.15-2.70 range. We are at the bottom of that range, in both FX and bond markets.

From here, SocGen prefers to be short yen than short Treasuries.

“Now that we’ve see a sizeable long position build-up in CFTC data, We’re more inclined to view this latest move as the last hurrah of the bond bulls, and fade it by staying long EUR/JPY and going long USD/JPY,” SocGen advises.

USD/JPY is trading circa 109.35 as of writing.

For lots more FX trades from major banks, sign up to eFXplus[2]

By signing up to eFXplus via the link above, you are directly supporting Forex Crunch.

Get the 5 most predictable currency pairs[3]

from Forex Crunch

from Online Forex Trading Resource
View thesource article here


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s