Wednesday 9 November 2016

The Trump factor high rocketed the USD/JPY pair

As expected there was high volatility and this naturally perplexed the markets. The winner turned to be Trump and therefore the US Dollar began to weaken against the major currencies. The Mexican peso hit a record low. The greenback began to weaken against the Japanese Yen and the EUR as well and pinned 101.20 and 1.1300 respectively. Looking for safety, markets turned to more secure currencies – the Japanese Yen and the Swiss franc.  

After marking the low at 101.20, the USD/JPY pair quickly pushed higher to print new fresh 4-month high at 105.85. Although at the moment the uncertainty has gripped the markets, the pair is continuing its rally, as seen on the 4-hour chart. 
And indicators seem to favour the rally. Its clearly seen the sharp bounce from the oversold areas. RSI is showing overbought market and is currently placed at 63%. Stochastic turned to north and is also confirming the strong bullish slope. Another point is that the price has returned back above the levels of the 100-day and 200-day SMA. 
First resistance is seen now at 106.00 while the first support is currently located at 105.50.



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