FX Headlines: Dollar, Yen Take Bids as Safe Havens as Japan Nuclear Crisis Worsens
• Kan Seeks Calm as Japan Tries to Contain Meltdown, Panic Buying - Bloomberg
• Fed’s Next Steps Divide Economists as Asset Purchases Slow - Bloomberg
• Bahrain Declares State of Emergency – Financial Times
USDJPY: The USD/JPY pair remains the most quizzical trade over the past few days considering the events in Japan. As the Dollar has gained against its other major counterparts – mainly the Australian Dollar, Canadian Dollar, and Euro – it remains unable to gain against the Yen. Seemingly, even as the country’s equity markets fall into a tailspin, investors find the Yen as the best outlet for safe haven. Our focus remains on the USD/JPY pair over the next month given the parallels to the 1995 Kobe earthquake.
Taking a look at price action, key support at the 23.6 Fibo retracement on the September 17 to November 5 move has been broken. Now, with the pair nearing the bottom of its descending channel from mid-November, a break below 80.500 appears to give way to a clean fall through 80.000. Currently, the USD/JPY pair is sitting just below 81.000 after touching the range bottom at 80.570.
Written by Christopher Vecchio, DailyFX Research.
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