Talking Forex: JPY Weakness Observed Across The Board

EUR/USD
The emergence of risk on sentiment following reports that Japan Public Pension Fund (GPIF) is considering a change to its portfolio strategy failed to support the pair and instead the pair came under pressure, after the surge in USD/JPY prompted the USD index to recover. There was little in terms of fresh macroeconomic news flow, but analysts at Goldman Sachs said that they expect the ECB to keep rates unchanged at next meeting and also refrain from announcing any new policy easing measures. Separately, IMF deputy managing director Shinohara said Europe recovery remains elusive, US fiscal consolidation might be a little too fast and that growth momentum slowed for China. Technically, support levels for EUR/USD are seen at 1.2919, 1.2838 and then at 1.2809. For GBP/USD, technical support levels are seen at the 76.4% retracement of the 1.4832 to 1.5607 move at 1.5015, the 30-day lower Bollinger level at 1.4970 and then at 1.4915.

GBP/USD
Similarly to EUR/USD, the pair came under pressure on the back of fresh demand for the greenback which was spurred on by reports that Japan Public Pension Fund (GPIF) is considering a change to its portfolio strategy that could allow domestic equity share of investment to rise in rallying market. In terms of technical levels, supports are seen at the 76.4% retracement of the 1.4832 to 1.5607 move at 1.5015, the 30-day lower Bollinger level at 1.4970 and then at 1.4915.

USD/JPY
JPY weakness was observed across the board after it was reported citing sources that Japan Public Pension Fund (GPIF) is considering a change to its portfolio strategy that could allow domestic equity share of investment to rise in rallying market. According to sources, the main idea under consideration would be for the pension fund to change the way it assesses the potential risk. Without the shift, the fund could be forced to buy Japanese government bonds. It could also have to sell Japanese stocks in an equity market that has rallied more than 60% since November. Technically, resistance levels for USD/JPY seen at 102.59, 103.74 (2013 high May 22) and then at the 21DMA upper Bollinger level at 104.46.