26 Aug 2015
USD/JPY: a scalpers paradise
FXStreet (Guatemala) - USD/JPY is currently trading in high volatility, a dream for scalpers n tight stops on tow way business with five minute sticks of ranges as wide as between 10-40 pips on the session so far.
USD/JPY is back on to the 119 handle, at time of writing, before one blinks, as Tokyo gets fully under way. The downside is favoured in the major on risk aversion and caution is at play on attempts at the 120 handle where the majority of the price action resumed over night by the Europeans and US traders before the close of play on Wall Street when investors became nervous to hold overnight long positions and took profits on a dead cat bounce in stocks, EM's and commodities.
Wall Street: a dead cat bounce
Wall Street had been buoyed by better risk sentiment following the PBoC intervention when the Central Bank stepped in to control liquidity in the Chinese economy and improving sentiment in global markets.
PBoC intervention
In addition to PBOC injecting 150bn yuan via 7-day reverse repos yesterday, the PBoC cut the RRR by 50bps to 18.00% with additional cuts for individual sectors. The PBoC also cut the deposit rate by 25bps to 1.75% and lending interest rates by 25bps to 4.60%.
Attention shall now be on the Shanghai Composite Index of shares once again and a data dependent theme of the Federal Reserve while US Durable goods will be monitored as well as hearing from Fed's Dudley for further clues to the FOMC's approach to the current uncertainty in Global economy.
USD/JPY volatility around 119 handle
Volatility is playing out around the 119 handle and below the key psychological 120 handle. 121.30 remains the key upside level, and while below there the downside levels come as 120.30, 119.60, 118.40, 116.13 that then open up 115.14. We have the 23.6% retracement of the entire move up from the 2011 low at 113.98 as key support.
USD/JPY is back on to the 119 handle, at time of writing, before one blinks, as Tokyo gets fully under way. The downside is favoured in the major on risk aversion and caution is at play on attempts at the 120 handle where the majority of the price action resumed over night by the Europeans and US traders before the close of play on Wall Street when investors became nervous to hold overnight long positions and took profits on a dead cat bounce in stocks, EM's and commodities.
Wall Street: a dead cat bounce
Wall Street had been buoyed by better risk sentiment following the PBoC intervention when the Central Bank stepped in to control liquidity in the Chinese economy and improving sentiment in global markets.
PBoC intervention
In addition to PBOC injecting 150bn yuan via 7-day reverse repos yesterday, the PBoC cut the RRR by 50bps to 18.00% with additional cuts for individual sectors. The PBoC also cut the deposit rate by 25bps to 1.75% and lending interest rates by 25bps to 4.60%.
Attention shall now be on the Shanghai Composite Index of shares once again and a data dependent theme of the Federal Reserve while US Durable goods will be monitored as well as hearing from Fed's Dudley for further clues to the FOMC's approach to the current uncertainty in Global economy.
USD/JPY volatility around 119 handle
Volatility is playing out around the 119 handle and below the key psychological 120 handle. 121.30 remains the key upside level, and while below there the downside levels come as 120.30, 119.60, 118.40, 116.13 that then open up 115.14. We have the 23.6% retracement of the entire move up from the 2011 low at 113.98 as key support.