USD/JPY is trading extremely heavy as the market goes on selling USD mercilessly at the open of European trade, following what is perceived as a huge surprise by market participants, after the FOMC, against all odds, delivered a surprisingly dovish outcome.
USD longs ‘arrivederci’!, bears having a pips’ feast
The main theme in the markets continues to be selling USDs outright, with the Japanese Yen benefiting as well, despite the risk appetite being invigorated (not the case in the Nikkei 225 though), courtesy of the Federal Reserve’s change of course. The continuous weakness in the pair is mostly driven by the bail out of longs in USD/JPY (caught on the wrong-side), while intraday algo activity/momentum players are contributing to inflict pain to the battered USD, unable to muster the shallowest bounce.
USD/JPY sets sight in 111.00
As mentioned in earlier articles, the breakout of 112.00 leaves the prospects of further downside business wide open, with the main focus now being the 2016 trend lows circa 111.00, seen as the next big target for bears. A resolution behind this latter would expose a more ambitious target towards the 110.00 level. Any rebounds intraday should be seen as selling opportunities should price action/order flow agree.
(Market News Provided by FXstreet)