USD/JPY – on the front foot in post Brexit trade

Markets are still digesting Friday’s Brexit shock, although USD/JPY seems to have taken the stock of the situation and is moving higher in Asia, trading well above 102.00 at the time of writing.

Nikkei rises as Yen drops

The Japanese benchmark index Nikkei strengthened 1.6% following Friday’s debacle, mainly on account of the recovery in USD/JPY. The pair opened at 101.54 today and quickly recovered the lost ground. Still, there is too much uncertainty in life after Brexit and that could weigh over risk assets and thus cap gains in the pair.

At the time of writing, the pair was trading around 102.30; while the Friday’s closing was 102.44. Brexit shock had pushed the pair to an intraday low of 99.02, before the recovery in the Cable and UK’s FTSE index helped the pair trim losses.

USD/JPY Technical Levels

The immediate hurdle is seen at 103.73 (hourly 50-MA), which if breached shall open the doors for 103.95 (5-DMA) and 104.41 (10-DMA). On the lower side, support is seen at 101.50 (Asian session low). A violation there would expose 100.71 (50% of Oct 2011 low - Jun 2015 high).