My first post on the forum, I would love some feedback!
EURJPY- Daily downtrend ended on 2020/05/15 in which it started doing HH and LH.
As of now, I expect a sustained uptrend (Reached and reacted to the monthly fibo retracement) breaking out the weekly trendlines with a possibility of reaching 130.000 if momentum is strong enough.
I would be looking for a breakout at the lower timeframe (1hr/4hr) for entry confirmation if we broke 125.000.
Fundamentals;
EUR- At a time where US real yields are rising more than Bund yields, this
could lead to investors taking profits on existing longs, keeping spot
moves locked in the narrow 1.16-1.20 range held since summer.
However, A Biden presidency and loose Fed likely keeps the USD
weak versus its major trading partners. We expect the global growth
backdrop to materially improve next year and experience less trade
friction, EUR positive.
JPY- We remain less constructive on the performance of JPY relative to
other G10 peers due to our expectation for the relative real rate
differentials to favor a more range-bound path. Ultimately, with the
BoJ willing to remain reactive, not proactive, in their MoPo efforts, Fed
policy will be the most important factor in determining the outlook for
JPY.
