JPY was in buy-back mode in Asia following the sell-off overseas on Friday following the release of weaker-than-expected US Q3 GDP data. Lows of 117.22 recorded in Asia and 117.63 highs reached in early London.
A speculative push for sub-117.00 stops was thwarted by good importer demand and option related USD buying. This activity shook the market and brought about a short covering bounce from 117.22 to 117.63 in early London. The market is now playing a 117.30 to 117.60 range with little in the way of a bias.
Option barriers at 117.00, bids 117.20 and stops below the figure. There are also offers rumoured at 117.60-70. The buzz in the market for the last month has been the shift in some countries' reserve balances in favour of the Yen.
With the market reportedly still headlong into the "carry trade" there are fears, highlighted by today's FT front page, that a wind change in the currency market could see a scramble to close out short yen positions, causing a spike down in USD/JPY and EUR/JPY.
We have already seen a big technical shift to the downside in USD/JPY with a trend line break Friday and further confirmation so far today.
No comments:
Post a Comment