JPY experienced a session of consolidation, with momentum lacking in both pairs. Although the bias remains up in both USD/JPY and EUR/JPY, moves higher are being impeded by the defense of topside option barriers. In USD/JPY the 120.00 barriers continue to captivate market attention, with amounts reportedly in huge size. Some guesstimates suggest these offers amount to as much as US$10 yards, with extremely large stops above. A large amount of these barriers are due to expire at the New York cut, while the remainder run off in the latter part of the month. Very good bids are seen in USD/JPY on dips and this underpinned despite a move from 119.65 down to 119.25/30 in early Europe. Leverage accounts, importers and speculative accounts remain buyers.
EUR/JPY has option barriers at 150.50, 150.75 and 151.00. The 150.50s and 151.00s are seen to be especially large, while option strikes at 150.00 and 150.25 supply the market with Euros, along with ongoing exporter interest. This has resulted in range bound activity despite a run down to 149.65 in Asia. CTAs and Asia proprietary names were buyers after 149.60 to 149.50 stop losses held.
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