USDJPY is looking dodgy as yen buying picks up
We’re seeing a decent bout of risk aversion as London and Europe look to close up shop. The swissy is seeing some action alongs side the yen and Nikkei futures have tumbled too. At the moment we’re seeing some anxious moments in all things Japan and while the wider market isn’t looking as fearful, at some point they all might join in.
So, USDJPY is down close to the 112.00 handle and if it can’t hold up there, there’s some good looking support down around 111.70/80.
The confluence of the 200 & 100 ma’s at 111.71/74, plus the 111.75/80 level being a former S&R level makes it look enticing for a long. My main problem is that I’ve turned very bearish on this pair and would rather sell a decent rally, and so I wouldn’t trust it with a big trade. If it is to be strongly supportive, what I am expecting (should 112.00 break) is that perhaps we see a stop run through that area, which then reverses, and then builds support there. This is certainly something to watch and I won’t trade it this close to the weekend if it happens. I guess we’ll have to see how it goes from here.
Once again we’ve not got any headlines to drive these moves but the sentiment looks like it’s definitely bearish. In case you needed further convincing, we’ve got a Fed hike coming and the US tax Bill on its way yet the dollar has done nothing but head lower. As signals go, they don’t come much bigger than that.
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