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USD/JPY Forex Technical Analysis – Spikes Higher on Algorithmic-Driven “Meltup”
FX Empire
James Hyerczyk
FX EmpireJanuary 1, 2020
The Dollar/Yen soared in early Asian trading on Wednesday as the break of key technical levels triggered massive stop-loss buys of the U.S. Dollar amid very thin trading conditions. Last year, we saw
a similar move to the downside that the headline writers called a “meltdown”. Following that line of thought, let’s call this move a “meltup”.

At 05:19 GMT, the USD/JPY is trading 111.120, up 2.460 or 2.26%. The high of the session is 111.264.

With risk appetite high, the U.S. Dollar has been taking a beating against a basket of currencies for about two weeks. Today’s move took care of those shorts trying to drive the Dollar/Yen lower.

The surprise rally was exacerbated by a dearth of liquidity, with Japan and the U.S. on holiday for New Year’s Day. I would describe the event as a “market dislocation” rather than a fundamental
event. Although the USD/JPY should’ve been rallying the last two weeks with the stock market hitting record highs.