MUFG Research discusses its tactical views on USD/JPY and EUR/USD into the coming week.
MUFG is neutral on USD/JPY expecting the pair to trade sideways in a 106.50-109.00 range, while holds a bullish bias on EUR/USD expecting the pair to trade upwards in 1.1250-1500 range in the near-term.
USD/JPY: "The cancellation of speculative JPY short positions and the FRB’s accommodative stance are likely to help market jitters ease somewhat. There is nothing clearly driving USD/JPY downward. If a floor in the 107-108 range firms, then USD/JPY could rebound to the upper 108 level," MUFG notes.
EUR/USD: "The euro has continued to grind higher against the US dollar over the past week. It has broken above key resistance from the 200-day moving at around 1.1345, and is now looking to build on those gains. It has already attempted to break back above the 1.1400-level but failed. We still believe that the US dollar remains vulnerable to the downside in the near-term as the Fed moves closer to cutting rates,"MUFG adds.