FXStreet (Mumbai) – USD/JPY post Greek referendum recovery was rather short-lived and the pair fell back in to red closer towards 122 handle towards Europe open, having filled the overnight bearish gap in Asia. The major remains undermined largely on broad JPY strength driven by the risk-off defensive trading environment following the Greek ‘NO’ vote.
USD/JPY drops from 122.70
Currently, the USD/JPY pair trades -0.45% lower at 122.23, retracing from 122.70 highs reached in mid-Asia. The yen took back control and dragged the major once again closer to fresh six week lows of 121.89 as a fresh bid wave gripped the Japanese currency with European traders stepping in. While ANZ analysts noted on Monday, “Sentiment is driving ‘risk’ currencies lower and safe havens higher.”
The yen strengthened versus the greenback in today’s trade so far as traders flocked to safety-havens such as gold, treasuries, yen etc., after uncertainty gripped the markets as the Greek referendum ended in landslide ‘NO’ victory for Greek government led by Tsipras, with markets now weighing possibilities of Grexit and ECB bankruptcy.
A No vote implies the ECB will cancel Greek bank funding which then hastens a Grexit. Greek Prime Minister Alexis Tsipras is reportedly holding an emergency meeting on banking sector liquidity on Monday.
In the week ahead, Greek saga will continue to remain in the spotlight while Fed minutes release will also be closely watched for hints on the timing of the Fed rate-hike.
USD/JPY Technical Levels
To the upside, the next resistance is located 122.79 (June 28 High) levels and above which it could extend gains 123.20 (June 29 High) levels. To the downside immediate support might be located at 122.10 (June 29 Low) below that at 121.89 (July 5 Low) levels.
(Market News Provided by FXstreet)