19 Feb 2016
USD/JPY breaks through 113.00, risk-off back in vogue
Further selling pressure is building on USD/JPY, with offers far outweighing bids, resulting on a break of 113.00, setting fresh 5-day lows at 112.87, with the possibility of additional losses very likely.
Risk-off drives Yen higher
Yen buying comes as the Nikkei 225 is sent into a tailspin, approaching -2% for the day after a substantial down-gap at the open, and on the back of renewed stress in US financial markets. On Thursday, the SP500 finishing the day -0.13% while US 30-year bonds were under heavy demand, as was gold, signaling the return of risk-off flows. Traders should be watchful for any signs of verbal intervention by Japanese officials, with a fall below 112.00 probably the line in the sand before direct intervention may take place.
USD/JPY key levels for the day
On the downside, the next key level for the pair can be found at 112.50 mid round number, which also represents a high volume node from last Feb 13th, followed by the critically important 112.00 (BOJ intervention chatter should increase). On the upside, 113.00 is the first hurdle overhead, with a recovery above 113.30/40 required in order to ease growing sell pressure.
Risk-off drives Yen higher
Yen buying comes as the Nikkei 225 is sent into a tailspin, approaching -2% for the day after a substantial down-gap at the open, and on the back of renewed stress in US financial markets. On Thursday, the SP500 finishing the day -0.13% while US 30-year bonds were under heavy demand, as was gold, signaling the return of risk-off flows. Traders should be watchful for any signs of verbal intervention by Japanese officials, with a fall below 112.00 probably the line in the sand before direct intervention may take place.
USD/JPY key levels for the day
On the downside, the next key level for the pair can be found at 112.50 mid round number, which also represents a high volume node from last Feb 13th, followed by the critically important 112.00 (BOJ intervention chatter should increase). On the upside, 113.00 is the first hurdle overhead, with a recovery above 113.30/40 required in order to ease growing sell pressure.