- USD/JPY bleeding out and poised for further risk-off induced downside.
- 109.69 comes as an upside target which is required to ease the bearish threat.
USD/JPY is trading around the 108 handle between a range of 107.46 and 108.72, currently positioned at 107.68 and flat on the session in the final hour of trade on Wall Street, pressured as US stocks head towards a losing close for the session. The S&P 500 is -1.55 into the final minutes of trade.
The risk-on sentiment is shortlived in this day and age pertaining to the COVID-19 crisis that is sweeping throughout the world, crippling global trade and now tearing through third world nations, the first to really feel the economic devastation, despite being last to be coronavirus infected. There is a growing feeling of unease and a sense of panic on a global scale, not least pertaining to the virus but due mainly to the economic impact.
The bell curves may be a positive factor for, but it is severely outweighed by the prospects of a global recession and potential depression in many parts of the world, driving the Central American Bank for Economic Integration to scramble towards approving a $1.9 bln program to support regional efforts to contain coronavirus and to mitigate the economic impact.
USD/JPY downside exposed
Indeed, the yen is a favoured store of liquidity at times of such crisis, and with the US dollar a little loser, perhaps its time for a revisit to the downside on USD/JPY putting a recovery towards the Feb 20 high of 112.23 and 112.40, Apr 24th 2019 high back on ice? The scramble for dollars appears to have eased with the Fed’s extraordinary measures helped to quench the market’s thirst for dollars.
The next support lies at 106.76, Mar 18 low and 106.45, 50.0% of the March 9-24 rally and a test with a close below of this area would set the scene for a deeper pullback.109.69 marks a key upside target which is required to ease the bearish threat.