For the USDJPY parity, the FOMC minutes / Fed President Powell’s speech on June 19 and the BoJ meeting and President Kuroda’s speech on June 20 were important and before the current developments, we explained that the negative trend expectation for USDJPY parity continues under the 109,12 – 108,58 region.
With the FOMC minutes and Fed President Powell’s announcement, the Dollar accelerated the depreciation against the Yen, strengthening the negative trend outlook for the USDJPY parity and making significant progress towards our target. With this in mind, the parity that broke the 107.85 level downwards is moving firmly towards our target of 106.85.
Main scenario: The USDJPY parity continues to look negative under the 109,12 – 108,58 zone above the upper point of the downward trend. The parity may retreat to the 107.35 and 106.85 support if the trend expectations continue. In particular, a downward breach of the channel’s lower point of 106.85 may strengthen the possibility of a downward retracement towards the acceleration of sales pressure and the last bottom support of 104.72. Otherwise recovery may be observed towards 109,12 – 108,58.
Alternative Scenario: Movements over 109,12 – 108,58 should be monitored in order to end the negative expectation for USDJPY parity and to ensure that a positive opinion can take precedence. However, with this condition, new pricing towards 109.70 and 110.23 and 110.88 levels can be followed.
Pivot: 109,12 – 108,58
Support: 107,35 – 106,85 – 106,45
Resistance: 107,85 – 108,58 – 109,12