General USD weakness has not really affected USD/JPY with the pair holding up relatively well overnight on the back of sizeable carry trade interest, especially in the JPY crosses. USD/JPY is, so to say, out of the loop and dealers expect more of the same today.
Japan October industrial production data probably won't help unless much stronger-than-expected. Median forecasts are for a 0.4% m/m decline. USD/JPY does continue to see large offers around 116.50, and these look to continue to cap unless the IP data proves to be much weaker than expected. Even given a weak IP report, with USD still generally weak, any push to the upside should be limited. Specs are eyeing some stops above the line of offers at 116.50 however and these could be tripped.
Other specs are sure to cap it immediately thereafter however. Downside support is seen at 115.85-90 again with bids below 116.00 still seen thick. The New York low was limited to 115.90 and London to 115.93 overnight. USD/JPY currently trades 116.23/26.
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