Yen Technical Indicators Warn That Rally Risks Retracement
- Stochastics suggest the dollar the most oversold in 7 months
- Japanese currency faces key hurdle, Fibonacci levels show
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The yen has posted some of the most surprising gains against the dollar this year as the Trump reflation trade faltered. That may be drawing to a close.
Technical levels closely watched by traders suggest the dollar is now oversold. That’s in addition to the completion of year-end repatriation demand in Japan and renewed expectations of U.S. fiscal stimulus in the way of tax reform, which may combine to lift the dollar’s prospects into the second quarter after the yen’s 5.2 percent gain.