Other yen pairs have shown even more impressive gains, suggesting investors are continuing to reduce their safe haven holdings as equities continue to push higher.
Some would argue that it can’t be truly “risk-on” without the participation of the USD/JPY. Well, the USD/JPY, which has been coiling for several days, has broken higher today.
Other yen pairs have shown even more impressive gains, suggesting investors are continuing to reduce their safe haven holdings as equities continue to push higher.
It is worth watching the USD/JPY for further development in the days ahead, because other major currencies are holding their own rather well against the greenback. So this breakout has the potential to fail.
Source: TradingView and ThinkMarkets
The key support area is at 107.85-108.10, which was formerly acting as resistance. For as long as this area holds, the path of least resistance would be to the upside.
Some potential resistance levels include 108.65 (which was being tested at the time of writing), 109.00, and 110.00.
The bears must wait for the right opportunity – for example, if the breakout fails and rates go back below the abovementioned support, or ideally beneath the recent low at 107.08.
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