The Dollar-Yen pair jumped to 200-DMA of 110.33, suggesting the investors are not really worried about the potential for a political turmoil in the UK.
Sky News forecasts Hung Parliament
As per the latest BBC report, Theresa May’s Conservative party is seen falling short of a majority. Meanwhile, the talk of a hung parliament is gathering pace.
The latest Sky News forecast sees PM May’s Conservative Party narrowly falling short of a majority. It also predicts a hung parliament. Clearly, the political situation in the UK could be taking a turn for the worst. However, the Yen remains on the back foot. The losses in the GBP/JPY mainly represent the weakness in the GBP/USD pair.
The resilience in the Dollar-Yen is confusing, given the treasury yields are trading weak as well. The FTSE 100 futures too are trading 0.5% lower.
Caution is advised as the weak tone around the Japanese Yen could be an advanced warning of a ‘bear trap’ in the FTSE 100 and Sterling.
USD/JPY Technical Levels
The spot was last seen trading around 110.25. A break above 110.33 (200-DMA) would expose 111.07 (50-DMA) and 111.71 (June 2 high). On the other hand, a break below 110.00 (zero figure + 5-DM) could yield a sell-off to 109.38 (previous day’s low) and 109.11 (June 7 low).
Note - The daily chart shows bullish price RSI divergence.
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