JPY Trading Outlook (26-08-2014)

USD/JPY The vast majority of the day’s USD/JPY range had already been carved out by the time NY opened. Prices gapped up in Asia to 104.49 before running into offers ahead of 104.50 barriers. From there prices drifted back to NY afternoon lows from Friday (post Yellen and Draghi speeches) by 103.85. A soft US New Home Sales report put a quick end to a muted intraday rebound. Kuroda’s speech Saturday maintained his pledge to forge ahead with QQE for as long as it takes to get wage-driven inflation well established. But with the USD/JPY heavily o/b coming into a holiday-thinned week with ltd data and prices within one yen of this year’s 105.45 peak and 104.59, 61.8% retracement of the pre-post crisis slide, the urge to book some profits while awaiting breakouts above those hurdles is not insignificant. That urge would become more of a purge if prices were to fall below the 100-HMA & hourly Cloud base, last by 103.73. That Cloud base rises to 103.95 tonight, pressing prices to either resume their rise or correct. EUR/JPY was again rejected near the Aug 1 high on ECB QE, IFO & Ukraine concerns. July Corp Service Prices from Japan are out tonight.