USD/JPY is meeting good two-way interest around the 115.75/80 area after spot broke down in the wake of a weak Chicago PMI release. The headline number came in at 49.9 forcing spot below 116.00 and through stops below 115.90. Not surprisingly a bout of aggressive US name selling came over the release, with some prime names getting the heads up just before judging by price action.
Japanese names and other European interbank types have been good sellers, trying to execute stops on behalf of position traders and CTAs. Standing bids from importers and real money names are doing a decent job of soaking up the supply and the pair is showing signs of stabilising. The London fix should provide some interest, with hedge fund and corporate activity expected to be healthy due to month-end business. The dollar wants to go lower but it looks like a real struggle for USD/JPY.
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