Japanese Yen (JPY) resilience echoes ongoing trade war concerns

Intermediate
  • The intensified friction between the US and China since the end of last week with respect to the trade war saw safe haven assets rally, then selloff at the star of this week.
  • For the Japanese Yen, the technical impact from the flight to quality rally at the end of last week and early Monday was more significant than the subsequent correction.
  • For USDJPY, the negativity from the plunge last week to a multi-month low was not fully eased by the subsequent rebound, which highlights an ongoing “risk off” theme and highlights trade war fears.

USDJPY erratic, but bias stays lower

A setback and minor bounce Tuesday after the Friday-Monday plunge to a new cycle low through 105.02 and notable support at 104.56, and despite an intraday rebound Monday, whilst below 106.41 we see risks still lower for Wednesday.

The plunge below 106.75 set an intermediate-term bear trend.

For Today:

  • We see a downside bias for 105.49 and 105.14; break here aims for 104.40
  • But above 106.41 opens risk up to 106.73 and 106.98/107.09, maybe towards 107.28.

Intermediate-term Outlook – Downside Risks: We see a downside risk for 104.40.

  • Lower targets would be 101.19, 100.00 and 99.00.
  • What Changes This? Above 107.09 shifts the intermediate-term outlook back to neutral; above 107.57 is needed for an intermediate-term bull theme.
4 Hour USDJPY Chart 2019-08-28

4 Hour USDJPY Chart

Comments on this analysis

Your email address will not be published. Required fields are marked *


Latest News

The Forex Zone
The Forex Zone – Risk On

The US Dollar and the Japanese Yen weaken as the risk on environment continues. The Forex Zone looks at day trade themes for the major Forex rates; EURUSD, GBPUSD, USDCAD, AUDUSD, NZDUSD and USDJPY. EURUSD: Risks flip back higher A very whipsaw session Thursday through the ECB with an initial selloff through to just hold … Continued

EURUSD Chart
Euro in focus into key European Central Bank (ECB) Meeting

All eyes will be on the European Central Bank (ECB) Meeting today, which much anticipation around a more dovish shift. US Dollar weakness has seen EURUSD rebound in September with a resumption of a global “risk on” theme, but the EURUSD Forex rate losses over the past 24 hours highlight caution into the meeting. EURUSD: … Continued

aud usd chart
Australian Dollar stays strong in risk on scenario (AUDUSD)

The “risk on” phase has contoured into the second week of September as global geopolitical tensions ease. Positive news in early September regarding Brexit, the US/China trade war and from Hong Kong have seen stock markets advance higher. This positive news for the global economy has encouraged a push higher for the Australian Dollar, which … Continued

eurusd
Euro firm ahead of the ECB (as US Dollar weakens)

EURUSD gains over the past week have primary echoed US Dollar losses, as global financial markets have shifted to a “risk on” mode, with global geopolitical tensions easing. Positive news last week around the US-Sino trade war, Brexit and from Hing Kong have seen stock averages rally, whilst the US Dollar has weakened, having been … Continued


Forex Brokers in your location