USD/JPY guns through 118.00, topside sticky

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 13, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Bali) - USD/JPY is breaking above the 118.00 mark following another stable fix by the PBOC, which set today's USD/CNY fix at 6.5630 vs last close 6.5756, resulting in another positive input for a potential recovery of risk, which led to JPY selling.

    Shanghai open, China trade balance up next

    The next key risk events for the pair come from 9.30 GMT, when China stock market gets underway (Tuesday saw a flat day) ahead of China's trade balance. Any disappointing read on China trade could easily be perceived as another catalyst for risk off to return, as markets remain extremely sensitive to the 'state of affairs' in China and its currency/stock market.

    Topside should prove sticky, Bulls eye 118.30-118.50

    Judging by the current options positioning and pricing, further rises above 118.00 should prove fairly sticky amid an environment of selling volatility (implied volas well above historical). In addition to that, market makers continue to price Yen calls premium at much higher prices compared to puts. Should the bullish momentum extend, watch for 118.30/40 as next sticky point (high volume node Jan 8th) followed by mid-round number 118.50.
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