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USD/JPY: looks increasingly negative short-term

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 7, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Guatemala) - USD/JPY broke the 118 level with ease in Asia upon the risk aversion theme while the Chinese crisis dominates markets. Stocks (CSI300) were 2% down on the open and then 5% down very quickly and traded was halted by the circuit breaker.

    The market was then ceased altogether with the market down 7%. The Shanghai Composite is now 11.7% down year to date. Yesterday was the shortest trading session in China's stock market 25 year history and the Yen rallied and remains better bid. The FOMC minutes were dovish and yesterday's ADP was pretty much ignored in light of Global panic stations. Tomorrow's nonfarm payrolls might be the major's saving grace, but a poor result will open up the various downside possibilities between here and the weekly cloud support.

    USD/JPY levels

    Technically, USD/JPY is looking increasingly negative now having broken key support on the 117 handle and the downside is open all the way to the bottom of the weekly cloud at 113.47. However, 116.00 should be a strong support ahead of the 114.00/113.95 zone, which is the 23.6% retracement of the entire move up from the 2011 low.
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