JPY Trading Outlook (19-05-2014)

USD/JPY EUR/JPY remained heavy into week’s end, but USD/JPY and most of the other crosses simply consolidated recent yen gains in keeping with the broader financial market theme of the day. EUR weakness on poor local data and ECB easing expectations has accentuated the risk-off bid for the yen this week and left the cross below its weekly Kijun line at 139.89 into the weekly close; the first such sell signal since Oct ’12 in the early days of Abenomics. The downside focus is on the rising 200-DMA nearing the 76.4% of the Feb-Mar rise & the lower 21-wk Bolli by 138. Daily RSI at 21 is O/S, but the rising ADX is only at 22 with lots of room to rise before getting mature. USD/JPY got only fleeting lift from US housing data, in part due to the composition of the data (all multi-families) but also due to apathetic pre-weekend consolidation. A good mix of bidders into the April lows by 101.30 put the intraweek downtrend on pause for a second day, though upside looks challenging as exporters are seen having more to do than importers over the medium-term. A rebound in Tsy yields would help, but only to the extent stocks aren’t hurt by it. A Catch-22. Tankan out Monday.