BAML highlights four reasons for the decline of USD / JPY

18.01.2019 / 20:52

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Bank of America Merrill Lynch Research with a forecast for USD / JPY, which rather swords by revising its target for the cross to reach 101 by the end of the year.

According to the bank, there are signs of weakening US demand for dollars in Japan. They remain with the sword attitude. The forecast is based on these four reasons: 1. USD / JPY is increasingly sold during the Tokyo session; 2. Investment from Japan is starting to decline; 3. Low oil prices since the last quarter of 2018 suppress imports of energy raw materials during the first quarter of 2019; 4. Poor search for machines and production materials.

The revision in the target is down from 105 to 101 by the end of the year. BAML chose 101 for a level instead of 100 because 101 was a significant support in 2016. However, a break below 100 creates the premise to move to 95.

Trader Martin Nikolov

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BAML highlights four reasons for the decline of USD / JPY

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