What’s next for the Japanese yen?

By 14/01/2020News
Morning Stock News

Gold   1539,11
(-0,57%)

EURUSD   1,1138
(+0,03%)

DJIA   28868
(-0,01%)

OIL.WTI  58,07
(+0,05%)

DAX   13474,56
(+ 0,01%)

Yesterday the dollar/yen made an important breakthrough, reaching its highs since last May. Now it is at the most important level of 110 yen for 1 US dollar. As we all know, the Japanese currency is very trendy. That is, once the movement started, it can continue for a very long time. Trend is our friend, so we keep a close eye on what happens next.


USD/JPY chart of the day

USD-JPY chart of the day
There are now two main possible options. In one case there will be a false breakthrough, removal of stops and the pair will go down again. In the second case, the break-up will be true (probably, not from the first time) and the pair will move into the new growing range 110-115. Therefore, most speculators will use break-down strategies at this level, with small stops and large take profits. It is important for traders to keep this in mind when searching for entry points.

SWISS FRANC

Once again, please note that the second protective currency, the Swiss franc, shows an inverse trend. While the Japanese yen is falling, the franc is rising despite the new highs shown by the stock markets. This is a very bad sign personally for the European economy. Investors do not see how it will grow and what assets to invest in. This means they withdraw money in Swiss francs, even if they accept a negative percentage rate.

OIL

Meanwhile, oil falls for 4 consecutive days, all within the scenario we described earlier. And today it has already reached the level of 200 daily simple moving average. If tomorrow this level will be easily broken through, we can say that the bulls are completely capitulating. What can support the black gold? The best scenario for oil is a new round of tension in the Middle East.

What awaits us today?

08.00 Chinese trade balance data for December.
09.30 Speech by ECB representative Mersch
14.30 US consumer price index for December
15.00 Speech by FOMC member Williams


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