The currency strategists at Bank of America Merrill Lynch assume that USDJPY will resume its rally in the first half of 2012. They increased the forecast for Q2 2012 up to ¥85.00. Previously, they expected the currency pair to stay below ¥81.00. The preconditions for the near-term money-and-credit policies, which will be implemented by the US and Japanese financial authorities, suggest a rally.
Nevertheless, they expect that the US economic slowdown will revive investors’ hopes for QE3. BofA strategists are sure that in late 2011 (after the presidential elections) USDJPY will feel pressure caused by concerns over the USA’s fiscal policies and public debt.
According to experts, the Japanese Yen keep strengthening against the US Dollar. USDJPY is forming a downswing – wave С(С ) of Н16,
At this point it is forming sub-wave А(С)/С. The closest levels of support are located at 80.57, 80.42 and 80.08. The bearish wave will be completed as soon as the price breaks above the MF sloping channel and pivot 81.85 (as shown below):
