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Forex pairs in this Article » USD/JPY
FXstreet.com (London) - USD/JPY has found support at the May highs after a bout of risk aversion in volatile markets has seen a free fall in the pair.

USD/JPY suffers on volatility in EM’s and Abenomics

Derek Halpenny at The Bank of Tokyo-Mitsubishi UFJ, Ltd said that the yen move was more about the global risk aversion that intensified again yesterday rather than disappointment with the BOJ’s unchanged monetary stance. He said that the surge in the Yen has of course been predominantly about ‘Abenomics’ but it is important to remember that the gradual improvement in the US economy and favourable global financial market conditions induced in Europe by OMT by the ECB also played roles in lifting USD/JPY from November last year. He said we are now in the most unsettled financial market conditions since last summer and with ‘Abenomics’ under scrutiny with doubts over the credibility of the third arrow, a sharp unwind of yen short positions has been triggered. Still, he said, we were surprised by the scale of the move yesterday and are hence not surprised that USD/JPY has retraced some of this move today.

USD/JPY is technically a neutral play

According to ICN.com, the pair dropped yesterday and touched levels close to support at 95.50 then rebounded to the upside. This is the second attempt of achieving a four-hour closing above the referred to level and failing. They say by examining the technical indicators, they find that Stochastic is showing a positive crossover and an upside move, but Linear Regression Indicators are still negative. They prefer to remain neutral intraday today waiting for new confirmation signals. They suggest that the trading range for today is among key support at 95.00 and key resistance at 98.05 and the general trend over short term basis is to the downside as far as areas of 103.50 remain intact targeting 93.50.
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