USD/JPY: headed to 111.20? - Scotiabank

Analysts at Scotiabank explained that JPY is soft following an impressive bearish outside reversal off a fresh multi-month high. 

Key Quotes:

"The broader tone remains dominant as we note the absence of any material response to the release of stronger than expected retail sales for July. A continued fade of this week’s risk-off move favors near-term weakness in JPY."

"USD/JPY short-term technicals: bullish—USD/JPY completed a key reversal on Tuesday with a bullish outside range. 

The lower shadow of Tuesday’s candle is impressive, implying considerable support in the lower-109 to lower-108 area. 

USD/JPY has broken above both its short-term MA’s and appears set to push back toward its mid-August high around 111 with risk to the 50 day MA at 111.20."