MUFG Research closed out a previous short on EUR/USD from 1.0290 and is now taking its USD exposure into a long USD/JPY trade from 140.00. They target 146.00 with a stop at 136.50.
"We are recommending a new long USD/JPY trade idea... We believe there is room for USD/JPY to extend its advance in the coming weeks on the back of the hawkish repricing of Fed rate hike expectations," MUFG notes.
"We are more confident now that the Fed will deliver another large 75bps hike in September and keep raising rates closer towards 4.00% by early next year as it seeks to front-load tigtening in response to upside inflation risks," MUFG adds.
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