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:
-
Are investors shifting their holdings from safe-haven currencies and commodities to riskier assets as global optimism emerges?
-
Is the market simply grabbing liquidity and momentum to break past the 88-90 zone?
-
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?
This analysis and any provided information can be used only for educational purposes. SharmaFX is not a professional financial institution nor provides any financial services. SharmaFX does not provide any financial advice, investment advice, or trading signals. SharmaFX is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.