Yen Technicals: Watch The Headlines
Joe Perry | Jan 27, 2020 03:19PM ET
Germany released its IFO data earlier today, with the headline business climate number coming out worse than at 95.9 vs 97.3 expected. Stock indices around the world are lower today, however its not due to the IFO data, it is due to the fears of the spread of the Coronavirus, as my colleague Matt Weller noted. The flight to safety was obvious, as money moved out of stocks and into safe haven assets, such as Yen.
USD/JPY broke lower out of the rising wedge pattern at the downward sloping long-term trendline dating back to 2015. Today, price gapped lower from 109.25 on Friday down to 108.89 on today’s reopen and is currently putting gin a doji candle to the daily timeframe. Horizontal support and the 200-Day Moving Average come in near 108.50/60. Resistance above at the 109.17 low from Friday.
Source: Tradingview, FOREX.com
Get The News You Want
AUD/JPY and NZD/JPY were hit especially hard on the reopen, as their economies are dependent on China’s economy. China has already extended it Lunar New Year Holiday through next weekend, as officials are urging people to work from home on Thursday and Friday. There is the possibility that the virus can have an effect on GDP, spending is typically high over the Holiday period.
AUD/JPY gapped lower on the reopen today from a close on Friday at 74.96 down to todays open at 74.18. The pair is currently trading on its lows near 73.56. Horizontal support and the 50% retracement level from the low on August 26 to the highs on December 27 comes across at 73.30. The next support level of 72.50 is horizontal support and the 61.8% Fibonacci level of the same time period. Resistance above is at the 200-day Moving Average and Fridays close near 74.50.
Source: Tradingview, FOREX.com
Get The News You Want
Similarly, NZD/JPY seems to be putting in a topping formation as well. The pair gapped lower on the reopen from Friday’s close at 72.18 down to 71.61. As with AUD/JPY, NZD/JPY is currently trading on its low near 71.30 with support below at the 28.2% Fibonacci retracement level from the August 26 low to the December 27 high near 70.80. Below that is the 200-day Moving Average at 70.65 and the 50% retracement level from the same timeframe at 69.94. Resistance above at the gap fill near 72.18.
Source: Tradingview, FOREX.com
Get The News You Want
The next big event this week will be the FOMC meeting on Wednesday. Until then, the focus main focus for the markets will be the headlines from the spread and containment of the Coronavirus. Watch the headlines.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.