USD/JPY testing key support level

The safe-haven trade seems to be back on at the moment and yen demand is returning to the fore.

European bond markets put pressure on risk as peripheral bond yields started spiking again while German bunds and US treasuries strengthened. The result was investors flocking back to the yen and this saw USD/JPY print a low of 101.32. While the pair traded below the key 101.50 level, it hasn’t closed below it and that will be the key for the rest of the session. This 101.50 level has held since February and a break would open the pair up to a potential move down to 100 again.

The last time the pair traded below 100 was in November last year. Traders looking to trade a break below 101.50 could consider having stops above the 102 level. While there isn’t much on Japan’s economic calendar, later today we have Fed member James Bullard speaking, along with some housing data set to be released. This might have some impact on the USD side of the equation and result in some volatility for the pair.

USD/JPY
IG Charts

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.

Find articles by analysts