Citi highlighted the major support level of the Japanese yen against the US dollar, noting that the pair had managed to maintain its position above 152.
This level was previously identified as a key resistance point throughout 2022 and early 2023, serving as a crucial breakout area in 2024. Furthermore, the 200-day moving average (200 dma) is just below this threshold at 151.54.
The company noted that the stronger-than-expected US GDP and core personal consumption expenditure (PCE) data released today, coupled with their expectation of an aggressive Federal Reserve and no change in Bank of Japan policy ( BoJ), offer an attractive perspective. risk/reward scenario for investors considering tactical long positions in the USDJPY pair heading into next week.
Citi clarified that this recommendation is tactical in nature, given their broader expectation of a risky environment with increased volatility in the coming months. They suggest that while high volatility can lead to aggressive counter-trend moves, it is also an opportunity to profit from.
Looking ahead, Citi expects better opportunities to sell the USDJPY pair that could present themselves soon. They speculate that a rally to the 55-day moving average (55dma), which stands at 157.75, could offer attractive selling levels if it materializes.
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