USD/JPY Volatile

In the late August the Japanese Yen entered a period of high volatility amidst rising tensions between North Korea and Japan, namely the provocation with the passing ballistic rocket above Japan. In light of this, the Japanese Yen has depreciated against its counterparts.

The USD/JPY registered a climb from 108.26 to a high of 110.16. The pair is now trading at 109.91 as traders and investors are on the look for potential triggers that can make them take the defensive side and sell the Yen.

As to the downside, if the situation settles, we can expect to see the pair reach the support zone at 108.80. The trading environment in all markets now is significantly uncertain as we are entering September and market participants are anticipating new developments, events and policies that will hint a direction where the world economy is headed.

Chart: USD/JPY H4

USD/JPY Lower

USD/JPY fell below 110 for a second time this month as YEN bulls are pushing the currency higher. Some experts even predict that we might see USD/JPY below 100 this year as a result of a strong Yen. Whatever the case may be, it is obvious that the pair is in a downtrend that started after the short-lived post-presidential rally.

The pair is now 109.28, well below the 200SMA and dangerously close to the support at 108.13 for a potential double bottom. The 108.13 is now regarded as a first bear target. Beneath it, the levels around 106.20-107 make for a good support on the medium term.

On the other hand, if the US dollar gains new strength, the pair could reach the 200SMA at 112.50 as first bull target. After that, we can see price reach 113.70-114 as major medium term bull target.

Chart: USD/JPY D1