JPY Trading Outlook (27-08-2014)

USD/JPY Asia dumped USD/JPY, but the break below Monday’s lows and assorted hourly chart supports quickly attracted dip bidders late in Asia and then in Ldn and NorAm trading. Demand grew in NY after assorted 2nd-tier US data releases beat expectations. Dip buyers are running into a bit more long USD profit-taking 104+ as month-end nears and as prices remain o/b. Today’s high failed to clear the upper 21-d Bolli after being above it the preceding four sessions. Nevertheless, today’s long-legged Candle shows demand is brisk on any discounts. 104.50 barrier defenses linger, along with this year’s 105.45 high & the 61.8% of the ’07-’12 slide at 105.49. There is a slew of Japanese data out Friday into mo-end, an event that would normally argue for bulging long USD positions being pruned. EUR/JPY clings to support by 137 amid speculation Draghi’s JH speech will be a precursor to fast-tracking of ECB QE, beginning with already touted ABS, though the amounts there are modest at this stage. EZ CPI is also out this Friday and will tend to intensify or reduce talk of more easing at the Sep 4 ECB. The BOJ is seen steady at least until Oct.