JPY threatening to break out - BBH

Marc Chandler, Global Head of Currency Strategy at BBH, suggests that the yen is threatening to break out as the dollar closed below JPY105 for the first time since November 2016. 

Key Quotes

“It is the second weekly loss for the dollar and the third in four weeks.  It will carry a three-day losing streak into the start of the new week.  The technical indicators warn of further downside risk for the dollar and JPY100 is the next important chart area.”

“Since the beginning of February, speculators in the futures market have dramatically reduced their net short yen position from over 120k contracts to 22k, the least since late 2016.  The change can be almost fully explained by buying back of previously sold positions.  The gross short position has been reduced by 90k contracts.”