JXY: Possible indications of a shift in investors' sentiment?
|The Japanese Yen Currency Index, JXY, has been in a bullish trend since 2016 when geopolitical tensions rose between the UK and the EU, the US and China, and the Middle East. Hence, the investors steadily increased their holdings in safe-haven currencies and commodities, such as the Yen. The Yen appreciated the most since the introduction of the Covid-19 as it transitioned into a global pandemic in late 2019/early 2020. The Yen’s value depreciated as the global optimism surrounding the virus, travel industry recovery, and economy, emerged. This led to JXY breaking the bullish structure and is retesting the historical support zone.
On the weekly timeframe, the price broke the bullish structure, retested the structure, and revisited the historical support zone of 88-90. Currently, the price is consolidating around the 91/91.30 level, a level around which JXY has generated liquidity multiple times in the past. A few questions to keep in mind as new fundamentals are released:
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Are investors shifting their holdings from safe-haven currencies and commodities to riskier assets as global optimism emerges?
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Is the market simply grabbing liquidity and momentum to break past the 88-90 zone?
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Will the price remain in this range until interest rates across central banks increase and financial assistance (unemployment benefits, mortgage-backed securities, etc.) are tapered?
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