USD/JPY pauses as markets collect themselves in a correction of a bear trend


  • USD/JPY holding up in bullish territories as US equities correct higher. 
  • COVID-19 traders are Long VIX, USD, gold and JPY.

USD/JPY has been trading in a phase of consolidation as markets soak-up the COVID-19 humanitarian and economic risks and the subsequent response from global leaders and central banks. At the time of writing, USD/JPY is trading a 111.17 between a range of 110.75 and 111.68, flat on the day as we head towards the final hour of Wall Street's trading. 

It has been a risk-on session in New York, with the US benchmarks responding in kind to the US Senate to vote on USD2trn rescue package which includes a USD600 lift in the average weekly initial claim. This has been taken as a positive outcome in markets following US Senate leaders reaching a deal with the White House. There will also be helicopter payments of $1,200 per adult and $500 per child for those earning under $75,000 –  US President Donald Trump wants the payments dispersed by 6 April.

Across the Atlantic, Europe is also continuing to build its armour. "EU leaders are reported to be in favour of allowing countries to tap the European Stability Mechanism (ESM), which would release around 2% of GDP. That could trigger the ability for targeted, unlimited bond-buying under its Outright Monetary Transactions (OMT). Leaders meet Thursday," analysts at ANZ Bank explained. 

Risk-off is hear to stay

Meanwhile, we are seeing the VIX higher by 1% at 62.50, the S&P 500 +3.70% and the US 10-year Treasury -2.30% as risk flows favour the brave enough to catch these falling knives in the stock markets resulting in a pause in the USD. However, what needs to be remembered is the stimulus package will include curbs on share buybacks, which means Wall Street has just lost its biggest bid. 

While the scale and speed of the response are unprecedented, it does not mitigate the economic volatility and duress in the short run."Even though the huge efforts taken by policymakers to counter the economic fallout of the virus have soothed nerves, until confidence in the economic recovery is entrenched it is likely that investors will retain long positions in the USD and potentially other safe havens such as the JPY, CHF and gold," analysts at Rabobank explained. 

USD/JPY levels

USD/JPY

Overview
Today last price 111.22
Today Daily Change 0.00
Today Daily Change % 0.00
Today daily open 111.22
 
Trends
Daily SMA20 107.69
Daily SMA50 108.99
Daily SMA100 109.01
Daily SMA200 108.3
 
Levels
Previous Daily High 111.72
Previous Daily Low 110.08
Previous Weekly High 111.51
Previous Weekly Low 105.15
Previous Monthly High 112.23
Previous Monthly Low 107.51
Daily Fibonacci 38.2% 110.71
Daily Fibonacci 61.8% 111.09
Daily Pivot Point S1 110.3
Daily Pivot Point S2 109.38
Daily Pivot Point S3 108.67
Daily Pivot Point R1 111.93
Daily Pivot Point R2 112.64
Daily Pivot Point R3 113.56

 

 

 

 

 

 

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