JPY Trading Outlook (21-05-2014)

USD/JPY Yen pairs were heavy again, led by antipodeans. A rebound in the Nikkei o/n was fleeting and followed by more weakness in stocks in NorAm trading. AUD/JPY has plunged through much of its daily Cloud and gotten well inside the weekly one. Yen-funded carry trades are being unwound, particularly those with linkage to China. The 100-DMA, 61.8% & late-week Cloud base supports in the 93.27-30 range are the near-term target. NZD/JPY completed a 38.2% of the 81.40-89.90 rise with today’s 86.64 lows and is threatening a slide to 85.65, where the 61.8% overlaps the weekly Kijun & the current daily Cloud base. USD/JPY remains sequestered to ever-tightening ranges above 101 barriers. A daily close below the 200-DMA at 101.25 is awaited by techs looking for fresh sell signals. Sell stops noted below 101, more bids into the 101.76 lows of the year and stops below there. No policy shift expected from the BOJ tonight, which is a problem for those who were hoping for QQE2 to revive the yen slide from last year. Trade data for April tonight is a key post-tax-hike input for yen. EUR/JPY’s downtrend is aided by EZ spread widening into June ECB easing: 138 target