My picks: Flat JPY
Expertise: Global Macro, Classic Technical Analysis
Average Time Frame of Trades: 1 week - 6 months
I am staying on the sidelines in the Japanese Yen for the time being as macro trends in risk appetite and the currency's sustainability as a safe haven are resolved. On the risk side, the MSCI world stock index may yet put in a double top, and crude oil is setting up a rising wedge formation indicative of a bearish reversal. Fundamentally however, Japan's economy is clearly in a tailspin with GDP shrinking at an annualized pace of 15.2% in the first quarter, so it remains to be seen if the currency will decouple from risky assets in the days ahead. On balance, the outlook seems clouded and I will opt to remain flat until price action yields greater clarity.
