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USD/JPY breaks through 113.00, risk-off back in vogue

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 19, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    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.
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