CitiFX: 5 reasons for a pullback in USD/JPY
CitiFX closed its USD/JPY long from 105.99 at 108.37. Analysts are now looking for opportunities to buy the pair on further dips.
They outline the following reasons for a pullback in USD/JPY:
1) USD/JPY rally is capped by the trend resistance from the 2002 highs;
2) USD index is testing the 84.75-85.17 resistance with a bearish divergence;
3) US 5-, 10- and 30-year yields are likely to consolidate before hitting new highs later;
4) USD/JPY moved away from the US-Japan relative curve spread;
5) G10 JPY index indicates short-term JPY strength, peaking at the Dec. 2013 levels.