USD/JPY breaks 119.00, where is the limit?

By FXStreet FXStreet (Bali) – USD/JPY selling pressure is not abating, with sellers hitting yet another downside target at 119.00, with the lowest level printed so far at 118.97, an area in which profit taking is expected.

Since the decline off 120.45 mid-Tokyo session, there has been barely any correction in USD/JPY, which proves the point made earlier about the market turning very slippy below the 120.00 level, as per option players positioning. Market makers continue to price Yen calls at a much higher premium compared to Puts, further evidence that the selling is far from over.

Given that the pair has fallen by over 150 pips off highs, the profit-taking effect, together with reduced perception of value to keep selling the spot price at currrent levels, should see selling interest abate. However, if risk-averse conditions were to extend into the US and/or US ISM Manuf data were to disappoint, the pair may see further downward extensions, which may prove short-lived given mentioned spot location.
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Source:: FX Street