USD/JPY moves back to 103.00, volatility to remain elevated

Haresh Menghani FXStreet

Following an extreme reaction to the final outcome of the Brexit referendum, the USD/JPY pair has managed to recover over 500-pips from session lows to currently trade around 103.00 level.

Major central banks across the world, including Japanese central bank, stepped-in to calm jitters across global financial markets that assisted the pair to extend the recovery from its lowest level since Nov. 2013.

During early Asian trading session, Yen soared on global risk-aversion and safe-haven flows before BOJ announced to provide sufficient liquidity to curb sharp appreciation of the Japanese currency. Risk sentiment further took support from BOE’s general statement that it will take all necessary steps to ensure monetary and financial stability. Moreover, reassurance from UK’s PM Cameron that the economy remains fundamentally strong also contributed to calm investors' nervousness.

With a majority of the voters opting to leave the European Union, global financial markets might continue to remain volatile and turbulent on any news / development surrounding the referendum.

Watch out for momentum above previous support break-point, now turned immediate resistance, around 103.50. Weakness back below 101.50 support might trigger a fresh bout of selling pressure.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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