The US dollar has initially gapped lower against the Japanese yen as the drone attack in Saudi Arabia made news. There was a serious concern about crude oil flowing through the global economy, and the potential disruption of it. If it does not, that could be devastating for the global economy, and therefore people bought the Japanese yen as a form of a safe haven. However, since then word has gotten out that the oil production in Saudi Arabia should be back to normal within the next couple of weeks. If that’s going to be the case then it takes that piece of the puzzle off the table.
USD/JPY Video 23.09.19
The technical analysis is quite interesting, as the 50% Fibonacci retracement level has offered a bit of resistance, just as it had previously. At this point, the 50 week EMA has just crossed below the 200 week EMA, so that is obviously something to pay attention to as well. This is going to be a situation where global risk appetite will come into play, but currently it does look as if the market is starting to struggle a bit. That being the case, the market probably finds its way back down towards the ¥105 level. However, if we were to break above the long black candle to the left from a couple of months ago, then the market could take off to the upside, perhaps even as high as the ¥112 level and beyond. However, that would take a very good economic news around the world for that to happen.
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This article was originally posted on FX Empire
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