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Jan 05 - 10:55 AM

Credit Agricole: Revising Short-Term Fair Values for USD/JPY and EUR/JPY

By eFXdata  —  Jan 05 - 10:07 AM

Synopsis:

Credit Agricole provides an update on their FAST FX model, specifically revising the short-term fair values for the USD/JPY and EUR/JPY currency pairs. This analysis gives insights into the current and projected valuations of these major currency pairs.

Key Insights:

  1. USD/JPY Fair Value Adjustment:

    • The short-term fair value for USD/JPY has been adjusted upwards from 140.81 to 143.00.
    • According to the model, USD/JPY would be significantly overvalued if it rises above the level of 146.00.
  2. EUR/JPY Fair Value Reassessment:

    • Similarly, the short-term fair value for EUR/JPY has seen an increase from 156.94 to 157.44.
    • The model indicates that EUR/JPY would begin to appear significantly overvalued if it crosses the threshold of 160.50.

Conclusion:

Credit Agricole's latest FAST FX model adjustments suggest a bullish outlook for both USD/JPY and EUR/JPY in the short term, with revised upward valuations. However, the model also sets clear overvaluation limits for both pairs, serving as critical benchmarks for traders and investors. This update is instrumental in assessing the potential overvaluation risks and market expectations for these major currency pairs.

Source:
Crédit Agricole Research/Market Commentary

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