USDJPY, H4
Yesterday (May 25) I posted a news report on the US Markit Services PMI being a little softer than expected but that the USD had shrugged that news off and appeared to be comfortably above the 110 level. It also looked that sentiment was taking the USD higher over the coming hours as the US stock markets had had a great Tuesday and Wednesday was looking to support the USD too. The chart I posted was the USDJPY, H4 below, support around the109.77 level and Fridays high at 110.60 area.
Today (May 26) it was interesting to see such a rapid spike and move down overnight with nothing or little to explain it – see the TOP chart above. The recovery this morning, back again over 110.00, suggests that it was a big seller of the JPY (probably in Asia) and they were filled over night and that last Friday’s 110.60 area is again in reach. The risk reward on the trade today is acceptable, yesterday the target was too close to justify the entry.
However, a break and breach below 109.20 would suggest more YEN strength into next week as confirmed by the Daily chart below.
Janne Muta
Chief Market Analyst
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About Janne Muta, HotForex’s Chief Market Analyst
Janne Muta is a seasoned industry professional with over 16 years experience in the global markets. Originally from Finland, Janne has worked for institutions in both Helsinki and London as an institutional fund manager, global market analyst and FX educator.
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