JPY Trading Outlook (28-07-2014)

USD/JPY The daily Cloud top at 101.95 couldn’t be removed with the London open spike, or after the mixed US Durable Goods report, leaving intra-week longs and latent bears to push prices back toward the o/n lows into midday NY. That those 101.70 lows couldn’t quite be retested speaks to the recent dip-buying mindset and broader preference for dollars. The Nikkei finished the week close to July recovery highs, while the US yield curve flattened further on falling L-T rates. The converging 100- & 200-DMAs at 102.07 have exporter and supposed 101-102 DNT offers ahead of them, with stops beyond 102.10. EUR weakness, reinforced by this week’s EUR/USD close below the up TL from ’12 lows, kept EUR/JPY heavy and below recent highs by 137.35, but not yet below the ’14 low at 136.25. IFO and no good news from Ukraine weighed on the cross. NZD/JPY, which has been 0.9+ correlated to the S&P 500 on monthlies since ’07, is closing the week below its up TL from ’12 lows. Next week’s trading will focus on the FOMC and the NFPs. Japan’s June Household Spending will be an early-week focus as the after-effects of the Apr tax hike continue to be measured.