USD/JPY: Yen back in demand, risk off at full steam

By FXStreet Risk-off sentiment is slowly sinking into markets, with the Japanese stocks paring opening gains and thus, adding to the renewed selling pressure on the USD/JPY pair.

USD/JPY breaches 20-DMA support at 113.65

The dollar-yen pair kicked-off the week on a bullish note, extending its three-day winning streak and printed fresh one-week highs at 114. However, the upbeat momentum lost legs after a bout of risk-aversion gripped markets following weekend’s G20 meeting.

The G20 meeting was almost a non-event, but highlighted risks arising from Brexit. While ex-BOE Governor Mervyn King said that Euro zone is doomed and that the EU needs to break up. These news acted as the catalyst behind the recent strength in the yen, as the sentiment was hit badly, with the Japanese benchmark paring gains to now trade +.39% versus almost +1.5% previous.

Moreover, markets shrugged-off weak Japan macro data as focus remains on the stocks and the persisting risk-off market profile. Looking ahead, nothing of note for the major due later today, except for the Chicago PMI and pending home sales data from the US.

USD/JPY Technical levels to watch

In terms of technicals, the immediate resistance is located at 114 (daily high/ round number). …read more

Source:: FX Street