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
Bullish
GBP/USD
Bearish
USD/JPY
Mixed
Gold
Bearish
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
Oil - US Crude
Bearish
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
Bitcoin
Mixed
More View more
Real Time News
  • Selling pressure has seen the #DAX30 slip beneath its 200-day simple moving average just four days after it was establishing new records. Get your European equities update from @PeterHanksFX here: https://t.co/eMFqi8NKfr https://t.co/2tXGaBgUns
  • Risk events over the next two days (threaded tweet) from our own @ZabelinDimitri - when we're in that risk on/off mode, pretty much any of these can matter https://t.co/83dLD1J4Ku
  • Banxico Governor Diaz: - Not many economies have faced same uncertainties as mexico in recent years - BBG $USDMXN
  • Highly recommend checking this out ⬇️ https://t.co/mBHn9w6rUC
  • RT @ZabelinDimitri: Feb 27: - Bank of Korea🇰🇷 rate decision - French🇫🇷 President Macron meets with Italian🇮🇹 Prime Minister Guiseppe Conte…
  • Banxico Deputy Governor Esquivel: - Banxico needs to figure out if rate cuts should continue - BBG
  • The 10-Year US Treasury yield hits new all-time low as coronavirus fears continue $TNX
  • Commodities Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Gold: 0.69% Oil - US Crude: 0.00% Silver: -0.15% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/yXLFp7Regh
  • GOP Leader McCarthy says 4 billion needed for coronavirus, White House 2 billion figure is a little too low - BBG
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.69%, while traders in USD/CAD are at opposite extremes with 71.27%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/zPQWnGyNVL
Will the USDJPY's Extreme Drop Stall or Revive Bear Trend?

Will the USDJPY's Extreme Drop Stall or Revive Bear Trend?

2016-04-29 00:03:00
John Kicklighter, Chief Currency Strategist
Share:

Talking Points:

  • We evaluate how frequently extreme moves occur in the markets - defined by changes four times the average day's move
  • Looking at FX majors, SPX and Oil; we find that extreme moves are just as often acceleration as exhaustion points
  • After its extreme decline, USDJPY faces moderate support and lingering fears of intervention

See the DailyFX Analysts' 2Q forecasts for the Yen, Dollar, Euro, Pound, Equities and Gold as well as our favorite 2016 trading opportunities in the DailyFX Trading Guides page.

The hold on monetary policy by the BoJ last night triggered one of the biggest USDJPY declines in decades. This move carries a lingering tension for the markets. On one hand, there is a standing assumption that large moves are contrarian opportunities and readily mark reversals. We test this assumption by looking back over the past decade of market activity across the Dollar-based majors, S&P 500 and crude oil prices. There are in fact more instances where such dramatic moves have spurred acceleration to existing trends than those that have marked exhaustion and reversal. Context - as always - plays a crucial role in deciding the next important stage. Immediately below USDJPY is moderate support and lurking in the dark is the repeated threats by the BoJ and Ministry of Finance that intervention would follow extreme currency moves. However, risk trends and growing skepticism over central banks' ability to direct exchange rates is a rising wave for the market. We consider extreme moves with a focus on USDJPY in today's Strategy video.

To receive John’s analysis directly via email, please SIGN UP HERE

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

DISCLOSURES

News & Analysis at your fingertips.