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6 Feb 2013
Forex Flash: USD/JPY has a final capitulation feel to it now - RBS
The run in USD/JPY so far “has a final capitulation feel to it now,” FX Trading Strategist at RBS Greg Gibbs thinks, while “It is difficult to see the risk reward in buying at these levels,” the analyst adds, “too late to chase it now.”
“At some point soon the market is going to take stock,” he continues, and “may correct back to 88/90 as we approach the Italian election.”
“If the Abe government does keep up its activism,” Greg says, “the JPY is forecast to move towards 100 over the course of this year. But after its recent surge from below 80 three months ago to nearly 95, we are already three-quarters of the way there. 94.0 is the 38.2% Fibonacci level from the fall from the peak in 2007 to the low in 2011. 95.0 is a significant previous high and resistance level,” Mr. Gibbs concludes.
“At some point soon the market is going to take stock,” he continues, and “may correct back to 88/90 as we approach the Italian election.”
“If the Abe government does keep up its activism,” Greg says, “the JPY is forecast to move towards 100 over the course of this year. But after its recent surge from below 80 three months ago to nearly 95, we are already three-quarters of the way there. 94.0 is the 38.2% Fibonacci level from the fall from the peak in 2007 to the low in 2011. 95.0 is a significant previous high and resistance level,” Mr. Gibbs concludes.