USDJPY analysis: Fear of war

Intermediate

After the airstrike on Iran from USA sanctioned by President Trump, the week turned into quite a roller coaster. The threat of war with Iran has created a fearful first week in the market, as safe havens surged with Gold and Silver gaining around 2.4% and 2.7% respectively since the start of 2020, with investors trying to protect their capital from exposure in risky markets.

USDJPY Chart

The Japanese Yen (JPY) was of course a significant gainer as USDJPY fell through the supports and found support just below 108.00. On this daily time frame we see how we continuously had higher lows but eventually the bullish enthusiasm lost its steam and now with fear gripping the market, we could see even lower levels. This weekend we are waiting for any new development between US and Iran to understand the next direction for this pair. A fall through support would indicate continuation of a short trade, provided no deescalating news comes out during the weekend to ease investor fears that war will be averted.

USD JPY Chart


Looking at the 1 hour time frame, a down trend line and small resistance zone show potential level for reversal and a buying opportunity. If things remain the same, we could potentially see a ranging environment at first before the next trending move.


This trade will be largely determined by fundamental news from Iran and White House, but so far, quite a volatile start to 2020.

Editor

Anton is an accomplished Director at Markom Development Ltd where he combines cross functional competencies in staff management, operations planning, customer retention and strategy development. BU... Continued

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