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4 Jan 2016
USD/JPY: Relentless sell-off, 119.50 tested
FXStreet (Bali) - USD/JPY remains under heavy pressure, with the selling resuming as Tokyo players return from their lunch break, with the spot last trading at a new 2 1/2 month low of 119.50 after a brief consolidation between 119.65-85.
Option markets points at lower levels
As noted earlier, with the decisive break of 120.00 round number, and judging by the positioning in the options market, which suggests a very slippy outlook for the pair below 120.00 (option players are rushing to hedge their positions by selling the spot, which only fuels the downward momentum).
If one takes a look at the pricing of calls/puts by option makers, the premium being paid for Yen calls remains significantly higher as well, reinforcing the case for the market to remain heavy in January.
USD/JPY key levels
Looking at key levels for today, having broken the 150% projection of the 120.65-120 box at 119.68, the next target for bears resides around 119.38/40 (200% projection), followed by the next round number at 119.00. On the upside, the critical level to bare in mind is 120.00 ahead of 120.20 and 120.45/50 (highest of today's Asian session).
Option markets points at lower levels
As noted earlier, with the decisive break of 120.00 round number, and judging by the positioning in the options market, which suggests a very slippy outlook for the pair below 120.00 (option players are rushing to hedge their positions by selling the spot, which only fuels the downward momentum).
If one takes a look at the pricing of calls/puts by option makers, the premium being paid for Yen calls remains significantly higher as well, reinforcing the case for the market to remain heavy in January.
USD/JPY key levels
Looking at key levels for today, having broken the 150% projection of the 120.65-120 box at 119.68, the next target for bears resides around 119.38/40 (200% projection), followed by the next round number at 119.00. On the upside, the critical level to bare in mind is 120.00 ahead of 120.20 and 120.45/50 (highest of today's Asian session).