USD/JPY: low volatility

USD/JPY is consolidating within an ascending triangle. The moment of breakout is getting closer, though there’s still some scoop for further consolidation. The volatility during the last trading sessions has been very low.

Analysts at Credit Agricole point out that the pair is capped by the consolidation in US Treasury yields. At the same time, the risk sentiment has definitely improved and gains in stocks represent a positive factor for USD/JPY in the near term. In addition, there are signs that after several weeks of net inflows, Japan is finally beginning to register renewed outflows of portfolio capital which ought to add further downward pressure on the JPY. However, the fact that the speculative market remains net short JPY may limit the pace of yen’s depreciation.

USD/JPY is caught between rather strong levels. On the downside, the pair’s supported by the bottom of the daily Cloud in the 101.50 area and the hammer on the weekly chart with low at 100.75. On the upside, there’s resistance at 102.80. To break up we’ll need good data from the US – something that may not materialize in the near future.

Chart. Daily USD/JPY

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