JPY Trading Outlook (25-06-2014)

USD/JPY The USD firmed a bit today on decent new Home Sales and Confidence data, but it wasn’t enough to push USD/JPY out of the recent range between the Kijun at 101.80 and the 100-DMA at 102.22. There was an initial rise on the US data as shorter-term rates climbed, while S&Ps & Nikkei futures also gained, but the curve was flatter right from the start and eventually even short-term rates fell back, as did risk in general. A broken ceasefire in the Ukraine and talk of half-year-end portfolio selling in equities being on tap this week was enough to push USD/JPY off its 102.17 post-data highs and back to the converged 100 & 200-HMAs prices have been homing to lately. The late retreat in risk also pulled yen crosses lower. EUR/JPY’s 138.93 high stopped just shy of the 200-DMA at 139.00. Weak German IFO was shrugged off. Repeated sales into the 200-DMA mean that a break above it would likely squeeze out some of the recently accumulated spec shorts, as seen in the COT data. AUD/JPY, NZD/JPY & GBP/JPY are all showing overbought tendencies, the latter reinforced by the less hawkish Carney et al today. Abe’s 3rd arrow? Old news. Big JPY data day Fri.