Flash: USD/JPY primed for dip below 100.00 – Westpac

FXstreet.com (Barcelona) - According to Global FX Strategist Sean Callow at Westpac, “The failure of the EUR/USD to break 1.3000 and 200dma at 1.3023 adds to the preference to sell rallies based on relative growth, with EZ providing glimmers of hope (advance PMIs) but recession entrenched.”

“We target 1.2800, however no further for now as Eurozone financial stress index remains very low. Moving towards the USD/JPY, “The pair should have rallied strongly on Bernanke’s surprising reference to tapering policy; instead it is showing signs of the sharp correction we have long forecast.” Callow adds. Volatility in JP equities and JGBs should keep unsettling USD/JPY, with JP investors also selling foreign bonds again. The initial target is 100.00, 1-month 98.00.