Risk aversion in ascendant in global markets following the escalation in the US-China trade war (see “China’s Trade Retaliation Has USD/CNH Bulls Eyeing Decade-Plus Highs Near 7.00″ and “It is all about US-China trade war” for more). Global stocks are poised for their worst day this year, oil has seen a big bearish reversal, and economically-sensitive commodity dollars are the weakest currencies in the G10 space. Meanwhile, safe haven assets such as gold, bitcoin (tongue only partially in cheek!), treasury bonds, and the Japanese yen are on the rise.
Looking at USD/JPY, rates have now broken definitively below the late March low near 109.75 after forming an “inside candle” on Friday, shifting the near-term trend to bearish. Moving forward, sellers may now look to target the Fibonacci retracements of this year’s rally near 108.50 (50%), 107.60 (61.8%) or 106.30 (78.6%). At this point, only a break back above 109.75 would eliminate the near-term bearish bias.
USD/JPY Daily Chart
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
USD/JPY Hits 3-Month Lows Near 109.00 On Trade War Risk Aversion
* FOREX.com is compensated for its services through the bid/ask spread.