Yen trades broadly higher today as markets turn into risk aversion mode. Major US indices ended in red overnight, with DOW down -0.53%, S&P 500 down -0.40% and NASDAQ down -0.37%. Selloff continues in Asia with Nikkei trading down -0.64% at the time of writing, HK HSI is down -0.56%, and China SSE composite is also down slightly by -0.12%. Singapore Strait Times continue to defy gravity, though, and is up 0.48%.
USD/JPY dropped sharply after hitting 113.17 and the breach of 112.21 support suggests short term topping, on bearish divergence condition in 4 hour MACD. Deeper pull back is now in favor and the consolidation could last longer even though for now, downside is expected to be contained by 111.39 resistance turned support. In our weekly report, there was a position trading strategy of buying USD/JPY on dip to 111.85 retracement level. That was not filled before USD/JPY’s break of 112.79. We’ve cancelled this order and we’re now waiting for a deeper pull back to go long. Stay tuned.