Currency Analysis Report 10/17/19 – USD/JPY Is Hard To Trade At Times

Safe-haven currencies are currencies increase in value during times of uncertainty and market instability. Safe-haven currencies have the characteristic of being inversely correlated to the equity markets during economic turmoil.

The Yen as a safe haven is driven by factors such as Japan’s strong current account surplus, positioning the country as the world’s largest creditor nation. Additionally, the Yen is a popular carry trade, meaning investors often borrow Yen from Japan, where interest rates are low, in order to buy currency in a country where interest rates are higher.

The US Dollar’s safe-haven status is maintained by the “In God We Trust” reliability of the US Treasury to pay its investors. During times of market turbulence, investors sell risky assets and turn to US Treasuries and the US Dollar.

So sometimes, it very difficult to trade this USD/JPY pair because each currencies tends to trend up or down in the same direction. Nevertheless, in the short to medium term the direction of this pair is going to heavily rely on which way the US-China trade war goes. So lets go to the charts to see if we can get clues as to where this pair is headed next.

Monthly Chart (Curve Time Frame) - monthly supply is at 121.000 and monthly demand is at 101.000.

Weekly Chart (Trend Time Frame) – the trend is sideways.

Daily Chart (Entry Time Frame) – the chart suggests to go long if price pulls back to the daily demand at 107.00 with a target at the daily supply at 112.50.

This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.