USD/JPY: Further Downside Exposed
Admirals | Feb 11, 2016 08:26AM ET
USD/JPY has tanked breaking important patterns and supports clearly showing risk-off sentiment. Purely risk off sentiment across markets is the cause for yen to appreciate against the G10 currencies. Many carry trades involving cheap credit from Japan are invested across foreign markets, and during risk-off, many of those trades are reversed and repatriated back into yen, causing demand for yen.
Technically USD/JPY still has the room to fall down. As we can see on the chart, bear pennant has been broken to the downside making USD/JPY hit L5 weekly CAM support. Pullbacks within POC zone 113.90-114.10 could be used for another short selling. The zone shows strong confluence selling at the Bearish pennant breakout and we should see institutional selling again if the price retraces.
However if the price breaks now moment double bottom -110.98 it should proceed to 110.06 previous weekly high.
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