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Synopsis:
Goldman Sachs analyzes the recent sharp decline in USD/JPY and outlines a cautious approach to reengaging in long positions, anticipating potential stabilization around the 150 level.
Key Points:
Recent USD/JPY Movement:
Current Outlook:
Factors Limiting JPY Appreciation:
BoJ Policy Expectations:
Strategic Positioning:
Conclusion:
Goldman Sachs remains cautious about reengaging in USD/JPY longs immediately, given the recent sharp decline and potential for further downward movement to the 150 level. However, they see limited scope for sustained JPY appreciation without increased US recession risk and further Fed cuts. The firm maintains a 3-month forecast of 155 for USD/JPY and will look for better opportunities to reengage in long positions.
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This article was written by Adam Button at www.forexlive.com.
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