USD/JPY: downside favouritism dwindling before EU referendum?

USD/JPY is slightly offered with yen strength on the open in sessions away from the main event of the year so far, besides the Fed not hiking rates time and time again, nor the BoJ following through on its expectations time and time again neither.

USD/JPY's bullish case for 2016 has been shelved this month with market uncertainty, which is the only thing that remains certain as analysts at Bank of Tokyo Mitsubishi have put. 

Brexit: cash in on the dead end at least?

Brexit polls are back towards even and makes for a very close call this week in the 23rd and 24th when the vote will be decided upon this week. The Yen is a safe haven, but at the same time the dollar has also been attracting longs as the world's reserve currency and this has made for a consolidative phase in the major from lows of 103.51 scored 16th June to highs 105.05 made overnight. 

 A remains vote will likely see a good deal of risk-off positioned unwound very quickly, but the Yen could trump the dollar based on the Fed's new position, echoed by Fed Chair Yellen overnight who was reiterating the cautious stance portrayed in last week's decision statement, while the Fed soaks up the worse than expected data in the US economy of late and as markets look to the US elections as the next major risk to portfolios, support the downside case in USD/JPY fundamentally. 

USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet also noted that the bearish dominant trend seems to have found an interim bottom, a couple of pips above the multi-year low set earlier this month, establish therefore, a double bottom in the daily chart. "The neckline of the figure is the weekly high, set at 104.84, with a break above it suggesting a 130 pips recovery." 

She added that the technical readings in the 4 hours chart favors additional recoveries, "given that indicators are heading modestly higher within positive territory, although the 100 SMA has extended further its decline, now around 106.80. Should the advance extend, 105.50 is the key level to break to confirm a steeper recovery over the upcoming sessions."