Forex: USD/JPY range-bound before uptrend resumes: BofA Merrill Lynch

on Dec 12, 2013
Updated: Oct 21, 2019
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**iNVEZZ.com, Thursday 12 December:**

Since the start of December, the USD/JPY has twice attempted to break its 5-year peak of 103.74 set in May, but has so far failed to do so. Although some market observers have started to doubt the pair’s uptrend, analysts at the Bank of America Merrill Lynch remain bullish, foreseeing multiyear highs for the greenback against the Japanese yen.
In the view of technical strategists at BofA Merrill Lynch, “the current USD/JPY pullback must be seen as corrective and ultimately a buying opportunity.” Chartists at the US bank believe that only a more pronounced weakness from the 7-month high of 103.40 below 101.62 and the 101.14/100.62 zone of support, would negate the resumption of the larger uptrend. “Until then we stay bullish” with a target of 105.00, clarifies the research team at BofA Merrill Lynch.

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In the near-term, analysts at the US bank expect the pair to remain range-bound before a sharp turn higher that will exceed May’s top of 103.74.
So far today, the price action of USD/JPY has oscillated within the range of 102.39 to 102.86, with the latter reached as these words are written.

Meanwhile, the Nikkei 225 opened today with a gap down, at 15,377.32, after yesterday’s close at 15,515.06, with the slide continuing through to the end of Tokyo’s session at 15,341.82, down 1.12 percent for the day.
In the US, November’s Retail Sales report will garner traders’ attention, at 13.30 UTC. The market consensus is for a gain of 0.6 percent m/m, following October’s rise of 0.4 percent. However, economists anticipate the pick-up of US consumer spending in November to be mainly concentrated in auto sales due to the aggressive discounted deals near the Black Friday shopping period. As a result, the median economists’ forecasts for Core Retail Sales – excluding the volatile auto transactions – is for an increase of 0.2 percent matching the prior reading.
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