News & Analysis at your fingertips.

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. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Real Time News
  • $ARKK down to a fresh three month low but finding some support on this confluent fibo level. If the rates theme continues could add more pressure here
  • tech side of the $USD forecast already starting to fill in with today's bullish breakout 😎
  • I just finished my USD 4Q fundamental forecast with @JStanleyFX (who did the techs) at the end of last week. Today certainly jazzes up my assessment
  • The S&P 500 has opened with a sharp gap lower while the Dollar pushes an 11 month high. DailyFX's @JohnKicklighter talks about volatility, debt limits, and Fed forecasts!
  • $SPX trying to hold support after failing at resistance yday $SPY $ES currently about 4% off of the all time high
  • Nasdaq tumbles 2% $NDX
  • The ICE's trade-weighted $DXY Dollar Index is at an 11 month high today. Notably, its largest component - $EURUSD - has not slipped the August low
  • Stocks extend fall, Dow Jones down 1% following worse-than-expected US Consumer Confidence #trading $DJIA
  • Big enough disappointment to heap onto the risk aversion but not bad enough to restart speculation of a delayed November taper from the FOMC. Net net, further bearish pressure on $SPX
  • The $SPX has opened today with its biggest bearish gap since last Monday's tumble. Officially squashes the recovery momentum and now we are more balanced in facing fundamental event risk - bullish or bearish
USDJPY Will Drop as Risk Aversion Intensify, But It Will Rally if Severe

USDJPY Will Drop as Risk Aversion Intensify, But It Will Rally if Severe

John Kicklighter, Chief Strategist

Talking Points:

• There are many barometers that we can use to gauge the direction and intensity of investor sensitive

• Like the S&P 500, USDJPY is particularly adept at measuring 'risk aversion'

• As risk aversion hits a severe level, all carry/Yen crosses drop; but in true liquidation, USDJPY will rise

Sign up for a free trial of DailyFX-Plus to have access to Trading Q&A's, educational webinars, updated speculative positioning measures, trading signals and much more!

The S&P 500 is a great measure of risk aversion, but the USDJPY may be better. From the equity index, words like 'persistent', 'durable' and 'complacent' have been used to describe its incredible six-year run. When the US equity benchmark turns, it will therefore be indicative of a more intense shift in sentiment. This is a valuable measure for a very all-encompassing but also boundless concept, but it may not be the best. In the FX market, USDJPY can measure a more extreme level of fear. Like US equities, carry appetite has extended through minor pangs of risk aversion with the support of the BoJ's stimulus effort and a robust reach for yield. When risk aversion hits a rolling boil, the USDJPY and all Yen crosses will drop. Yet, when fear hits an extreme, we will see another turn occur as the Dollar starts to draw more appeal than its Yen counterpart as 'liquidity' overwhelms the need to deleverage existing carry positions. At that level, USDJPY will turn higher and we will have a signal of a much stronger drive in sentiment. We discuss USDJPY and its risk measures in today's Strategy Video.

Sign up for John’s email distribution list, here.

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