Bank of America Merrill Lynch FX Strategy Research still expects the USD/JPY to rise into year-end but the top-heavy market may persist for now as tensions over US politics and the North Korean situation may deepen into September.
"Our technical analysis sees potential downside into 106.52 (see here).
Under such a scenario, Japanese investors are likely to provide mild but insufficient support while exporters can increase hedging as USD/JPY gets closer to their assumption level, which stood at 108.3 for the fiscal year in the June Tankan survey," BofAML argues.
In line with this view, BofAML targets EUR/USD at 111 by the end of September and at 115 by the end of the year.
Source: Bank of America Merrill Lynch Rates and Currencies ResearchOriginal Article
