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.

IG Charts

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