The USD/JPY is In-Play as Fear and Volatility Mounts

Monday marked one of the biggest stock market sell-offs we’ve seen in quite some time. The last time stocks have seen a big correction was back in 2011 when markets fell 20%. There have been other periods such as Brexit and the lead up to the US election that has seen markets tumble, but they have always quickly recovered.

This time things feel different. After a prolonged bull market, sentiment is starting to turn. The Fed is looking to tighten and investors are getting spooked. It’s also times like this that traders and investors look for safety.

On Monday that we the JPY as money started flowing.

Yen Sell-Off Time?

The USD/JPY tumbled on Monday as money started flowing heavily into the JPY. At the same time, the USD was strong and held up, despite the carnage in stocks.

Looking at the charts we can see that 108.50 is the major support level in focus. I suspect we will be testing that level very soon. It’s worth considering two options. Either look for a test and sell early or wait for a break and pullback.

Either was as money looks for safety the USD/JPY will be a key pair in the coming week or two. As I suspect we are coming into a period of higher than anticipated volatility.