The Japanese yen is quite sold out despite the risks on the market and the trade tensions. Additional negativity can be created by the relatively quiet meeting between Donald Trump and Vladimir Putin. The question is when investors will look for JPY as safe heaven.
Technical formations at the Japanese currency crosses suggest a reversal of short-term trends. For all couples, we noticed 9th from DeM Sequential, with the price being stopped or pushed by the SMA200 by most pairs. The picture is also clearer from the highly overbought zone of DeM (14) at all JPY crosses.
We remain cautious mainly with EURJPY and CHFJPY where the price will be good for short positions with a close stop (above the last peak). Given the negative impulse at the start of the European session with the indices, if there is a strengthening of the negative sentiment toward the risk assets, we can look for short positions on AUDJPY and NZDJPY where formations also signal a downward movement.
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