Back on May 2 [see: Happy Anniversary] I noted that USDJPY was in danger of losing its last shred of support.
USDJPY has clearly lost the support of the rising purple channel from 2011, meaning the yen carry trade is on life support. It’s possible the yellow .786 will give it the bounce it needs, but it looks tenuous at best.
As it turned out, the BoJ must have come to the same conclusion. Because May 2 was the bottom, and USDJPY has since bounced an impressive 4.8% — though not without fits and starts.
Now that it’s reached its first serious resistance, will it be able to punch through? Can the yen carry trade be saved?
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