The Yen traded in the middle of the channel shown in the trend chart below. We climbed to 0.009887 at the start of the pandemic only to drop precipitously as stocks started their rally within two weeks of the first announcement. Since then, we have repeatedly tended to move closer to an instance at the end of July to peak at 0.0096050 while maintaining support on that rally to the tops. Likewise, the USD / JPY has maintained downside resistance to the yen following the pandemic news, so overall for the pair we remain in a similar channel, but on the upside.
Japanese Yen Chart [JPY or 6J]4
Meanwhile, market participants are wondering why the USD continues to fall against the yen. Could it be the returns? The US authorities’ pledge to keep rates unchanged and close to zero for the 2 year horizon kept yields in the US below Japanese bonds and have not really risen in value. This explains part of the conundrum with the prices of USD / JPY and precious metals. Governments around the world continue to print money to support their people with stimulus measures that have deteriorated the overall value of the US dollar like they did with a basket of currencies. We have a skyrocketing federal deficit and the United States National Department continues to climb above $ 27.27 trillion. Looking ahead, the risk-averse Japanese yen appears to be in a reasonable position. The risk that another stimulus package will not arrive before January 20e the inauguration of the new executive branch of the US government poses a threat to both local and external actions. Amid spreading virus counts and continued closures, the IMF warned last week that the global recovery appears to be losing momentum. Unlike China, cases of the virus in Japan were also setting records. This has caused Tokyo to raise its Covid-19 alert status to its highest level. While policy makers refrained from imposing lockdowns, they urged citizens to be more careful. The Nikkei 225, Japan’s benchmark stock index, ended its impressive winning streak earlier this month after closing at its highest level since 1991.
In the meantime, here is a tentative trade idea for the JPY. [6J] and USD / JPY:
At TradeGuidance, we try to give our followers clear and concise ideas for action supported by graphics every day. We strive to analyze price movements while taking into account the underlying fundamentals and present a set of tradable levels twice a day without confusing rhetoric that would otherwise derail the attention of short term traders. Our goals have always been to trade what we offer while encouraging our subscribers and followers to be patient and wait for the entry / entry fork while respecting the stops indicated while leaving profit targets entirely to the individual. . There is a risk of trading currencies, futures, stocks and options and there is a risk of losing all / part or in some cases more than what you initially invested. We try to keep you on the right side of the market with manageable risks so that you can come back to the markets every day. Follow us on Twitter at TradeGuidance where all of our ideas are presented first before they are posted on financial news sites.