Richard Perry
Independent Analyst
USD/JPY
Dollar/Yen is a difficult market to call right now. The yen weakened sharply last week as traders took a dim view of Japan and prospective recession. However, the move which added over 200 pips to Dollar/Yen has been entirely retraced, as fears over the impact on the US economy from COVID-19 have come out. Essentially though, both USD and JPY remain safe haven currencies in this time of elevated fear. As such the pair will likely remain choppy. Technically, the outlook for USD/JPY is positive whilst the support at 109.50 remains intact. After three big bear candles, a basis of support is coming in today and the pair has ticked higher above 110.30 again (the old key breakout). Despite this though, the hourly chart shows a downtrend formation of the past few sessions, where lower highs are forming. Resistance is around 111.00 but the hourly RSI needs to be watched as there is a slight positive divergence and a decisive move towards 60 would hint at renewed dollar positive bias forming once more. Initial support at 109.85.
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