Forex Flash: USD/JPY looking to build a base - OCBC Bank

Emmanuel Ng of OCBC Bank comments that he is expecting USD/JPY to start building a base around current levels with 90.80-91.30 expected to offer interim support with markets still awaiting news on the BoJ nominees.

He feels that an inherent expectation of sustained monetary easing remains very much entrenched and this mary arrest excessive falls in the pair, barring an implosion of risk aversion in the EZ. Looking to AUD/USD, Ng comments that with positive risk appetite subsiding, the AUD-USD may also remain on fragile ground in the current environment. Notably, Ng comments that the RBA’s Debelle noted this morning that the AUD is somewhat higher than what would be suggested by domestic fundamentals, adding that the elevated AUD’s value has been partly a result of QE efforts in some developed nations. In the interim, he remains in a sell rally posture for the pair with the 200-day MA (1.0332) to cap while initial support is expected towards 1.0205.