The USD/JPY has been relatively stable in recent weeks. What is the right forecasting model for the USD/JPY in the short and medium terms?
Here is their view, courtesy of eFXdata:
NAB Research, discusses the USD/JPY outlook-and – note that, in his model of the fair value, promotes the view that the USD/JPY is likely to rotate around the 107 level in the short term. S and targets for the USD/JPY at about 109 in Q3 and Q4.
““Our forecast is that it sees” the pair is approaching from the rear to the ¥109 as we head towards the second half of 2020, it is based on our base-case scenario is that he sees a recovery of the global economy on a solid basis in the second half of this year. This implies the buoyancy in the stock markets, as well as the more basic returns. Yet, we live in unprecedented times, with a high level of uncertainty.
Thus, we can expect more spikes in risk aversion, which should result in a USD/JPY hollow like the one we have experienced in the past two weeks. ‘The unknown known’, such as the potential risk of a second COVID-19-wave of infection with the u.s.-Chinese tensions (which is unlikely to go away, and could well intensify in advance of the us Presidential election), there are potential sources of instability, and on a worst case scenario, they could derail our base case is a recovery of the global economy,” NAB notes.
“Asset managers are ” long USD positioning has also attracted our attention. The digital is now the longest since the 2013-and-the conduct of a risk is a potential upside in the USD/JPY, if it eventuates. In the Medium term, we are also keeping a watchful eye on the central banks balance, as it seems, and the recent Fed’s aggressiveness, if it is maintained, is a potential headwind for the USD/JPY,” NAB adds.
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