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USD/JPY: Carry Trade Unwind Accelerates As Key Pivot at 101.70 Cracks

The USD/JPY is a key currency for risk sentiment as it is the primary signal for carry trade.


  • As markets have continued their risk aversion theme throughout 2014, the USD/JPY has headed south, and today made an important break of a key pivot at 101.70.
  • This was support going back to early December. Having been broken the chances that it extends down towards next key levels around 100.50 and 99.60 increase.
  • We can also slap a few downward sloping trendlines around recent price action and see that the pair is in a downtrend, with lower lows and lower highs. 
  • A retrace to 101.70 would be a level for fresh shorts to pile on.
  • The Nikkei has been a real poor performer during the year, and we should continue to watch how the correction there progresses as this week goes on.