From a technical and trading perspective USDJPY only a close above 109.60 will inject further upside momentum setting the stage for a grind higher to target the equidistant swing objectives sited at 110.57/69, however the continued failure to capture ground above 109.60 is causing concern to bulls. Risk sentiment is being weighed by continued Geopolitical concerns (US/China & Hong Kong Chaos). I would also draw attention to the current S&P500 and VIX positioning. The VIX is trading at levels that have witnessed market corrections in recent months, as highlighted in the chart. There is a window for risk shake out ahead of the annual year end ramp in risk markets, this will likely see a shakeout in weak USDJPY longs. The USDJPY daily chart flipped short yesterday, a breach of yesterday’s lows offers decent risk reward parameters for 1:2 trade to the short side, with a protective stop above today’s highs.
