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USD/JPY – Risk reversals retrace gains despite the breach of trend line hurdle

USD/JPY – Risk reversals retrace gains despite the breach of trend line hurdle

The Dollar-Yen pair closed yesterday above the resistance offered by the trend line sloping downwards from the March 10 high and July 11 high, still one-month risk reversals retracted gains.

One-month risk reversals

  • The risk reversal gauge declined from -0.85 to -1.0 on Tuesday, suggesting increased demand for JPY calls (USD/JPY Puts).
  • The decline in risk reversals indicates investors are not sure if the USD/JPY would be able to capitalize on the bullish break on the technical charts.
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