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USD/JPY: Relentless sell-off, 119.50 tested

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 4, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Bali) - USD/JPY remains under heavy pressure, with the selling resuming as Tokyo players return from their lunch break, with the spot last trading at a new 2 1/2 month low of 119.50 after a brief consolidation between 119.65-85.

    Option markets points at lower levels

    As noted earlier, with the decisive break of 120.00 round number, and judging by the positioning in the options market, which suggests a very slippy outlook for the pair below 120.00 (option players are rushing to hedge their positions by selling the spot, which only fuels the downward momentum).

    If one takes a look at the pricing of calls/puts by option makers, the premium being paid for Yen calls remains significantly higher as well, reinforcing the case for the market to remain heavy in January.

    USD/JPY key levels

    Looking at key levels for today, having broken the 150% projection of the 120.65-120 box at 119.68, the next target for bears resides around 119.38/40 (200% projection), followed by the next round number at 119.00. On the upside, the critical level to bare in mind is 120.00 ahead of 120.20 and 120.45/50 (highest of today's Asian session).
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