20 Feb 2015
USD/JPY: Bulls control price while above 118.80
FXStreet (Bali) - USD/JPY has exhibited erratic erratic moves since the last Europe/US overlap, with 118.80 - reclaimed last EU session - now being used as role reversal support area on dips, with today's Asia range displaying a dedated 25 pips range btw 119.10 and 118.85.
During Thursday, a huge vanilla option expiry at the NY cut at 119.00 worth north of 2bn limited the topside past the round number, with dips still finding solid buyin interest from Gotobi accounts and specs. While the market still has some leeway north to re-price Feb 12 misleading BoJ reports on Yen appreciation/easing discontent - negated by BoJ Kuroda presser this week -, which resulted in an abrupt sell-off in the pair, one should also take into account the latest Fed minutes, which raised more questions that responded answwers - perceived as less hawkish -, for a market that continues to price in the Fed 'lift-off' mid-year. US yields, with the US Treasury note 10y at 2.11% at the NY close, coupled with the Nikkei trading at a fresh 15-y high, are supporting the pair.
On a fundamental note, today we've seen BoJ Kuroda appear before a Parliamentery Committee to testify on monetary policies, with little news to note, other than the frequently familiar rhetoric, reiterating that achieving 2% CPI target is possible.
Technically, Jim Langlands, Founder at FXCharts, notes: "Back above 119.00 would hint at a run towards the 119.41 high and then to minor Fibo resistance levels at 119.60 and 119.90, beyond which we could see another squeeze beyond 120.00 and on to last week’s 120.46 high, although unlikely to be seen today. On the downside, below 118.80, the next point to watch will be at the session low and Fibo support at 118.40 (61.8% of 117.17/120.46), below which would head back to the previous session low of 118.23. A break of this will see a move to the daily Kijun (118.15) and then to 118.00."
During Thursday, a huge vanilla option expiry at the NY cut at 119.00 worth north of 2bn limited the topside past the round number, with dips still finding solid buyin interest from Gotobi accounts and specs. While the market still has some leeway north to re-price Feb 12 misleading BoJ reports on Yen appreciation/easing discontent - negated by BoJ Kuroda presser this week -, which resulted in an abrupt sell-off in the pair, one should also take into account the latest Fed minutes, which raised more questions that responded answwers - perceived as less hawkish -, for a market that continues to price in the Fed 'lift-off' mid-year. US yields, with the US Treasury note 10y at 2.11% at the NY close, coupled with the Nikkei trading at a fresh 15-y high, are supporting the pair.
On a fundamental note, today we've seen BoJ Kuroda appear before a Parliamentery Committee to testify on monetary policies, with little news to note, other than the frequently familiar rhetoric, reiterating that achieving 2% CPI target is possible.
Technically, Jim Langlands, Founder at FXCharts, notes: "Back above 119.00 would hint at a run towards the 119.41 high and then to minor Fibo resistance levels at 119.60 and 119.90, beyond which we could see another squeeze beyond 120.00 and on to last week’s 120.46 high, although unlikely to be seen today. On the downside, below 118.80, the next point to watch will be at the session low and Fibo support at 118.40 (61.8% of 117.17/120.46), below which would head back to the previous session low of 118.23. A break of this will see a move to the daily Kijun (118.15) and then to 118.00."