Japanese exporters have had the run of the market in recent sessions and have helped to keep the USD contained. A combination of corporate sell orders and option sales helped push USD/JPY down to 119.70 late in the Asian session and it took reasonable demand from U.S names in Europe and small short covering from Asia to drive the Buck back to 119.97-99.
Option defense remains a problem for the Dollar with 120.50, 121.00 and 121.50 barrier plays touted. There are also some 120.00 vanillas rolling off at today's New York cut. On the buy side and some distance from market there are rumours of sizeable Japanese agency bids and importer business in the low 119's. A little closer to home there is talk of institutional investor bids and semi-government USD demand between 119.50-119.70. Also hearing of stops under 119.45.
Last session's 120.15 highs serving as initial resistance and the overnight 119.70 low providing the support. The bigger picture is beginning to fall the Yen's way with a USD top in place at 120.45 and a brief USD/JPY break under the 10-day moving average, today at 119.80.
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