The USD/JPY has settled into a tight range after failing to break below the 90.00 price level. The solid band of support will help limit risks for traders using scalping strategies. Additionally, a new political regime has brought uncertainty over future interest rate policy and Yen direction which has limited bets for the traditionally low yielder.
Key Technical Levels
The psychological level of 90.00 has provided staunch support for the USD/JPY which could limit risks for high frequency traders. A solid floor will also provide an entry point for long positions However, traders must be aware that a break below such a level could lead to an extended move lower. The pair has found itself in a tight range between 90.00 and 91.75 which has narrowed in recent trading with 91.00 serving as the support level creating an ideal scalping environment.
Quantitative Metrics
The ATR for the USD/JPY has steadily declined and represent the second lowest percentage of the spot price at 0.99% of the majors listed below. A Bollinger band width of 528 pips and an implied volatility 13.65 are concerning and increase the risks of a breakout.
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