19 Feb 2015
USD/JPY testing lows circa 118.40
FXStreet (Bali) - USD/JPY has dropped from 119.80 to 118.42 intraday lows as more USD longs continue to pare back positions after a disappointing Fed minutes.
Option-related activity should keep the pair in relatively tight ranges as we head towards th end of the week, with a major vanilla option expiration today at 119.00 worth USD2.517 bln. On the downside, the lower end of the range around 118.30/40 should see solid demand as well.
Fundamentally, while the Fed sounded less hawkish than anticipated, we should not forget that Wed's BoJ Kuroda speech was perceived as Yen negative by the market, with his views on both the Yen and further easing unchanged, negating recent media reports that the Central Bank was worried about the pace of Yen depreciation or the scope for additional stimulus should it be required.
Jim Langlands, Founder at FXCharts, noted: "For now, it looks as though we are going to be in for a 118/119 type range, and having broken below both the 100/200 HMA’s (118.85/119.05) these will provide the first minor resistance levels. The dollar is actually sitting on quite an important pivot point right here, this being both the daily cloud top (descending quickly towards 118.00) and the daily Tenkan, and which may combine to act as a bit of a magnate today."
Option-related activity should keep the pair in relatively tight ranges as we head towards th end of the week, with a major vanilla option expiration today at 119.00 worth USD2.517 bln. On the downside, the lower end of the range around 118.30/40 should see solid demand as well.
Fundamentally, while the Fed sounded less hawkish than anticipated, we should not forget that Wed's BoJ Kuroda speech was perceived as Yen negative by the market, with his views on both the Yen and further easing unchanged, negating recent media reports that the Central Bank was worried about the pace of Yen depreciation or the scope for additional stimulus should it be required.
Jim Langlands, Founder at FXCharts, noted: "For now, it looks as though we are going to be in for a 118/119 type range, and having broken below both the 100/200 HMA’s (118.85/119.05) these will provide the first minor resistance levels. The dollar is actually sitting on quite an important pivot point right here, this being both the daily cloud top (descending quickly towards 118.00) and the daily Tenkan, and which may combine to act as a bit of a magnate today."