JPY Trading Outlook (15-10-2014)

USD/JPY traded almost purely as a derivative of the S&P during the NYC time slot, lagging well behind other dollar pairs as yen remained in demand, especially on the crosses against EUR, GBP and AUD. All three crosses are at or near the lows of the move and reflect wariness about the state of carry trades despite the feeble attempt of major stock markets to bounce. The early London highs at 107.30-35 will serve as a pivot point with yen bulls determined to use the ongoing weakness in the Nikkei to press their advantage. USDJPY 106.80-107.00 represents the 40 dma (106.88) and the liftoff point for the pair after the Fed’s Sep 17 meeting and is a key hold for the yen bears.