We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
Oil - US Crude
Bearish
Wall Street
Bullish
Gold
Bullish
GBP/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bearish
More View more
Breaking news

Chinese PMI Data Beats Estimates. Manufacturing 52.0, Est 44.8, Non-Manufacturing: 52.3, Est 42.0

Real Time News
  • Foreign exchange – or “#forex” – markets often pay close attention to politics and central bank policy. We offer a model for traders to gauge their impact on exchange rates. Get your market insight from @ZabelinDimitri and @CVecchioFX here: https://t.co/FbXc1Awu6a https://t.co/IZlYdXrnLm
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 6.93% Silver: 0.73% Gold: -0.41% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/wMbZni4GxM
  • "However, this downgrade may be the canary in the coalmine for other emerging market economies that may spread to their OECD counterparts" https://www.dailyfx.com/forex/fundamental/article/special_report/2020/03/30/Euro-May-Rise-on-ESM-Crude-Oil-Selloff-Deepens-on-OPEC-Price-War.html
  • You can't see it, but I have a seriously dubious look on my face https://t.co/vOEfdaHwyg
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.18% 🇦🇺AUD: -0.13% 🇨🇦CAD: -0.22% 🇪🇺EUR: -0.27% 🇬🇧GBP: -0.69% 🇯🇵JPY: -0.70% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/XyAyUgqavm
  • LIVE NOW! APAC Head Strategist @IlyaSpivak discusses the technical and fundamental $AUDUSD outlook for the week ahead here - https://www.dailyfx.com/webinars/378612179?CHID=9&QPID=917720&utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 95.82%, while traders in US 500 are at opposite extremes with 72.90%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/el9cpkaZNX
  • The $USD may rise versus the Singapore Dollar, Indonesian Rupiah and Malaysian Ringgit if capital flows out of #ASEAN countries as key U.S. data risks a selloff in equities. Get your market update from @ddubrovskyFX here: https://t.co/JWIRn6MLrK https://t.co/W3zdKcvSCJ
  • LIVE IN 30 MIN: APAC Head Strategist @IlyaSpivak discusses the technical and fundamental $AUDUSD outlook for the week ahead here - https://www.dailyfx.com/webinars/378612179?CHID=9&QPID=917720&utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • RT @DanielGMoss: Spontaneous spike prior to Chinese #PMI releases Strong results compared to previous record lows Non-manufacturing: 52.…
USD/JPY Targets February High Alongside Staggering Dow Jones Rally

USD/JPY Targets February High Alongside Staggering Dow Jones Rally

2020-03-24 22:35:00
Peter Hanks, Analyst
Share:

USDJPY Price Outlook:

  • USD/JPY continued higher on Tuesday, moving into view of February’s high
  • A surge in risk assets like the Dow Jones suggested a return of risk appetite, but a parabolic continuation seems unlikely
  • Thus, USD/JPY may consolidate in the days ahead as risk trends shift

USD/JPY Targets February High Alongside Staggering Dow Jones Rally

Risk appetite reemerged on Tuesday with the Dow Jones posting its largest daily gain since 1933despite poor economic data and surging coronavirus cases. Nevertheless, the market’s “fear gauge” continued to decline, with the VIX momentarily tagging the 36 mark before closing slightly north of 61. While the Dollar’s gain against the Yen may bode well for sentiment on the surface, the long lower wick on the VIX hints the regime of extreme volatility is not yet behind us – a prospect further evidenced by the Dow’s record-setting gain.

USD/JPY Price Chart: Daily Time Frame (May 2018 – March 2020)

usd/jpy daily price chart

Therefore, USD/JPY runs the risk of reversing lower should risk aversion return. Initial support may be offered by confluent trendlines around 109.70 before subsequent assistance comes into play at the Fibonacci level near 108.85. Together, the zones will look to ward off USD losses. Still, it is important to keep in mind the unusual trading conditions within which the market finds itself. With an unprecedented fundamental headwind, extreme risk aversion has seen Dollar strength reign – even against the Yen at times – as traders seek safety. Thus, proper risk management techniques are crucial.

Traits of Successful Traders
Traits of Successful Traders
Recommended by Peter Hanks
Traits of Successful Traders
Get My Guide

On the other hand, continued risk appetite may see USD/JPY test resistance around 112 and a break above would signal a willingness among bulls to push further. With that in mind, a daily close above February’s high of 112.22 would be an encouraging technical development. While recent price action and the parabolic recovery in USD/JPY would suggest sentiment has recovered completely, I am hesitant to suggest a similar recovery in risk assets like the Dow Jones and DAX 30.

Forex for Beginners
Forex for Beginners
Recommended by Peter Hanks
Forex for Beginners
Get My Guide

As a consequence, bouts of risk aversion can be expected which may see USD/JPY swing wildly in the days ahead – devoid of a defined trend. That said, patience may be the most prudent trading strategy for USD/JPY until a more clear-cut outlook can be evidenced. In the meantime, follow @PeterHanksFX on Twitter for updates and analysis.

--Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.