This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material 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 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Some positive housing data out of the US supported the greenback as existing home sales came in much better than expected. USD/JPY caught a bit of a tailwind from the whole situation and finally came off its base in the ¥122.50 region.
A disappointing flash manufacturing PMI out of Japan today also helped the situation as it caused some yen weakness. USD/JPY had a great run after finding support in May from around the ¥119.00 region and managed to climb to within striking distance of ¥126.00.
Unfortunately, the rally stalled in that region and the pair has come under pressure. This resulted in some consolidation around the ¥123.00 region. It now seems traders are keen to get involved in the pair again as it finds support from the 38.2% retracement of the recent rally.
The next resistance is in the ¥124.25 region, which is the 23.6% retracement of that move. A move above this resistance could see the pair challenge ¥125.90. On the calendar today we have durable goods orders due.