4 Dec 2014
USD/JPY: Option-related selling, exporters circa 120.00
FXStreet (Bali) - USD/JPY resumed its bull trend by reaching a new 7-year high at 119.85, just a whisker away from hitting the big year-end target that many institutions have been calling for at 120.00.
Should further bullish impetus be seen at the open of Tokyo, expect the major round number to see plenty of option related selling, with a growing number of offers via Japanese exporters probably stacked near 120.00, as the number is widely attractive for ongoing hedging activities.
Jim Langlands, Founder at FXCharts, notes: "There will be plenty of option related sellers trying to protect 120.00, but which if triggered will trigger more stops, although further progress will be tricky given the major Fibo resistance that lies at 120.13 (61.8% of 147.68/75.56)."
"If that is overcome, there is then not an awful lot to stop the dollar heading to the 22 July 2007 high at 121.68 and then to the 15 July 2007 high at 122.42. In the longer term, the target of 124.13 (17 June 2007 high) remains valid, but will take time", Jim added.
Should further bullish impetus be seen at the open of Tokyo, expect the major round number to see plenty of option related selling, with a growing number of offers via Japanese exporters probably stacked near 120.00, as the number is widely attractive for ongoing hedging activities.
Jim Langlands, Founder at FXCharts, notes: "There will be plenty of option related sellers trying to protect 120.00, but which if triggered will trigger more stops, although further progress will be tricky given the major Fibo resistance that lies at 120.13 (61.8% of 147.68/75.56)."
"If that is overcome, there is then not an awful lot to stop the dollar heading to the 22 July 2007 high at 121.68 and then to the 15 July 2007 high at 122.42. In the longer term, the target of 124.13 (17 June 2007 high) remains valid, but will take time", Jim added.