USD/JPY remains vulnerable to decline  - Scotiabank

USD/JPY appears to be forming a bearish shooting star reversal candle off a fresh multi-month high above 110 and  remains vulnerable to decline, according to Eric Theoret, Strategist at Scotiabank.

Key Quotes

“The bounce is notable and appears to be delivering a bearish shooting star reversal candle on the daily charts. Comments from finance minister Aso appear to have halted the decline in JPY as he highlighted the importance of stability in FX markets while underscoring the negative effects of ‘extreme, disordered FX moves’. BoJ Gov. Kuroda also expressed a desire for ‘stable’ FX moves.”

“USDJPY short-term technicals: vulnerable to decline—USDJPY appears to be forming a bearish shooting star reversal candle off a fresh multi-month high above 110. The RSI is well overbought above the 70 threshold at 78, and the near-term balance of risk appears to be shifting. The shorter-term (hourly) charts are also delivering clear reversal signals.”