Yen is on its worst losing stretch against Dollar, since 2012. Over past eight trading session, it has depreciated against Dollar by about 2%. Last time Yen lost that much is when, in 2012 Yen declined about 2.2% against Dollar in consecutive eight trading session. These kinds of losing stretch in Yen, quite rare. Over the past two decades, there has been only three instances, when Yen declined more than eight session at a stretch.
Straight 11 sessions back in 2001, resulting in decline of -4.4%, 9 sessions in March, 2005 resulting in -3.16% decline and 9 session in November 1997 leading to a decline of -5.1%.
Looking from this window, it is probably time to exercise caution, especially when Yen is reaching towards crucial support against Dollar around 114 area.
Support area for Yen stretches from 114.4-115.5 against Dollar, which has so far been defended by bulls, four times. Now it is again up to the bulls to support Yen for fifth time around.
Recent stimulus from European Central Bank and China has reduced volatility in financial markets and prevented deterioration of Chinese economy, even if it’s temporary. Japanese benchmark stock index, Nikkei has risen in past five of six weeks, pressuring Yen to weaken against Dollar.
Next few days likely to be crucial, especially with US payroll report approaching on Friday.
Yen is currently trading at 113.6 per Dollar.
The material has been provided by InstaForex Company – www.instaforex.com