The strongest housing starts numbers since 2008 have helped to sooth frayed market nerves and most of yesterday’s drop in USD/JPY has now been erased.
The pair has rebounded more than 230 pips from yesterday’s low and is 230 pips from Friday’s closing levels. The turnaround started in Asia, suggesting local accounts were eager to unload yen.
Europe continues to look like the favored Japanese destination. The momentary EUR/JPY weakness following the soft ZEW numbers was wiped out and the pair has climbed nearly 400 pips from yesterday’s low. A continued rise threatens a bullish engulfing candle.
EURJPY daily chart