The “safe haven” Japanese Yen hasn’t been popular with the currency market for a couple of weeks. The USD/JPY pair is slowly growing and this movement is not very typical for the instrument, which usually moves “wavily” due to the outside fundamental pressure. By the beginning of the third September week, the pair has moved away from the month’s lows by 4%, and that’s a good result.
The world is ready for risks. The external fundamental background is looking pretty calm and there are no geopolitical tensions right now. In such situation, the markets are not interested in “safe haven” assets. Of course, it concerns only the current situation, because there are enough delayed risks. For instance, North Korea continues testing ballistic missiles. Needless to say that they don’t reach the Japanese coast, but make other countries nervous, both neighboring Japan and those that are far away. While the world leaders are discussing whether they should try to affect North Korea by means of sanctions, force, or other “tools”, everything is running its course. Eventually, the market will get used to this driver as well.
Recently, there have been some rumors in the Japanese mass media, which haven’t been confirmed officially. News agencies report that in October there might be early elections of, one may guess, the Cabinet of Ministers. If the rumors are supported, the Yen may get under significant pressure against the USD and the Euro due to the political factor. It’s a short-term influence, which might as well continue the current trend in the USD/JPY pair.
In other respects, the Yen is pretty quiet. In case of the low demand for “safe haven” assets, the Yen retreats, in case the demand is high, vice versa. After all, there aren’t too many such assets on the market.
When it comes to the technical analysis, the USD/JPY pair is back to growing. After breaking the resistance level of the mid-term descending channel and fixing above 110.00, the price has reached the resistance level of the projecting channel. At the moment, the pair is testing 111.88. in the nearest future, the instrument may be corrected to the downside towards the support level at 109.20. to confirm this scenario, the pair has to break the support level of the current ascending channel (colored in green). However, if “bulls” break the resistance area along with 111.88, the pair may grow to reach the next upside target at 114.00.
Author: Dmitriy Gurkovskiy, senior analyst at RoboForex
Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
RoboForex
RoboForex is an international brokerage company offering its services to clients in various countries across the world. The company provides traders with access to its proprietary trading platforms. RoboForex Ltd is a licensed company (License No. IFSC/60/271/TS/17). To learn more about RoboForex, please go to www.roboforex.com.
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