Risk off scenario sees the Japanese Yen rally (sets USDJPY lower)

Intermediate
  • A broader risk off scenario has taken hold this week, with global stock averages signalling short-term topping patterns.
  • This has been a reaction to various factors including trade war concerns, Middle East tensions and more recently the heightened impeachment threat to US President Trump.
  • This has produced a “flight to quality” across asset classes with Bond markets higher and in the Forex space has seen a rally in the Japanese Yen.
  • Here we focus on that Japanese Yen rally, highlighting downside risks for USDJPY.

USDJPY: Risks stay lower

A Tuesday plunge after a rebound failure exactly from our 107.80 resistance, to surrender 107.28 and 107.17 supports and reinforce losses since Friday’s plunge below 107.75, to keep risks lower for Wednesday.

The mid-September push above 107.58 set an intermediate-term bull trend.

For Today:

  • We see a downside bias for 107.15; break here quickly aims for 106.93/91, maybe 106.57.
  • But above 107.43 aims for 107.80.

Intermediate-term Outlook – Upside Risks: We see an upside risk for 109.32.

  • Higher targets would be 109.93/110.00 and 112.40.
  • What Changes This? Below 105.69 shifts the intermediate-term outlook straight back to an intermediate-term bear theme.

4 Hour USDJPY Chart

usdjpy

Steve Miley

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

Comments on this analysis

Your email address will not be published.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


Latest Related News

US Dollar (USD) resilience

A quiet week sees Dollar Yen (USDJPY) extends gainsMinor negatives on the Aussie (AUDUSD) and Kiwi (NZDUSD) represent partial profit taking points Continued

“Risk on” theme points the Japanese Yen lower (USDJPY forecast)

The Japanese Yen remain under negative pressures with global financial markets continuing their “risk on” theme into the start of 2020.This has seen USDJPY strength over the past week since the de-escalation of tension in the Middle East and leaves the USDJPY forecast for further gains (see the technicals below).The “risk on” theme has been reflected by global stocks staying strong over the past 24… Continued

Previous signals confirmed with US Dollar strength

US Dollar rotates up (DXY)Euro down (EURUSD)Pound hovers above final short term support (GBPUSD)Major signals in the Japanese Yen (USDJPY bullish) and Canadian Dollar (USDCAD bullish). Continued

Early 2020 volatility gives way to “risk on”

As we highlighted in last week’s MacroWatch, the bullish sentiment that started 2020 was significantly damaged by the increase in geopolitical risks from the U.S. airstrike that killed General Qassem Soleimani, the Iranian Quds Force chief.Moreover, global stock averages plunged lower in the middle of last week as Iran retaliated with airstrikes aimed at U.S. troops in military bases in Iraq. This also saw the… Continued

GBPUSD forecast remains to the downside

Global financial markets have seen some aggressive swings to tart 2020 with the tension in the Middle East, particular on the individual stock and equity index, alongside the Gold and Oil markets.On the Forex side, however, despite a choppy tone to USDJPY and Japanese Yen cross rates (due to the aforementioned tensions and the Japanese Yen’s position as a safe haven currency), FX markets have… Continued

Forex Brokers in your location