The recent pullback among the yen pairs has likely cleared a good number of carry trades allowing us the opportunity to rejoin the game from better prices levels. None there less we do have rate decisions coming from Canada and Europe today and tomorrow with consensus calling for rate cuts suggesting it will be more appropriate to re-establish any carry trade after we see the effects of the rate cuts. Given elevated pricing of Yen pairs there is room for prices to ease further in response to a policy easing.
Resistance
- 157.474 – Intraday Consolidation Resistance
- 156.524 – Daily Consolidation Floor
- 155.967 – Intraday Consolidation Floor
Support
- 154.803 – 50D Moving Average
- 153.589 – May 16 Low
- 151.840 – Pullback Low
USDJPY has pulled back to the 50D Moving Average with the daily stochastic pushing oversold. Looking at patterns we are still seeing higher lows with our pullbacks for the pair and excluding the two decade highs, higher highs as well. Given all this we continue to advocate playing the carry trade game with proximity to the 50D Moving Averages suggesting a buy at market to hold for fresh highs in the days ahead or at the very least see some profit off the carry trade.
