The Japanese Yen appears to bi in demand, but not for very long
As the Japanese Yen took to the fray today with stocks falling amid concern about an imminent Ukrainian default and an escalation of the limbo in its government the US dollar has managed to stay steady in New York and is putting into question the whole JPY safe-heaven story.
As of right now there is not much direction in the Yen trade since the bulk of activity during the day has been coming from both sides of the market. In order to obtain a more sound signal we would need some chart developments to take hold here.
The first opportunity is a break to the upside. As of right now the pair is threading water around 102.40 and it is peacefully neglecting any volatility and big moves across other asset classes.
In order to maintain a bullish status-quo the USD/JPY binary options forex pair needs to break new highs. For now this means that it has to close on a daily basis above 102.70. That would trigger a trade on our side - it will be a daily call trade on a sustained hourly close above the above-mentioned level.
On the flip-side we have the opportunity to buy daily puts. That would require the pair to drop substantially from current levels. The main support level lies around 102.20 right now and we are certain to see a protracted fall if that level is broken decisively.
While traders will be the judges whether this level is broken thoroughly we would be curious to see what could happen if we sustains daily close below 102.20. For now we are inclined to believe that a drop towards 101.50 will be the imminent result.
If that dip never materializes expect to see a rebound towards the top of the range and a test of last week's high around the 102.80-85 area. Standing in the middle of this range we will remain sidelined until one of the sides takes the initiative and tests some key levels.