Time for a safe haven?
In some countries, there will be a shortened trading week this week. The trading venues in Oslo, SIX SX, Budapest, Vienna, Frankfurt, Copenhagen, XETRA and Sydney will be closed on Monday. However, the week may be exciting, and market participants may face higher volatility.
Because the prospect of cheap money has often led to stronger movements in the markets, U.S. equity markets rose despite weak labour market data. On the one hand, the prospect of an interest rate cut by the Fed would favour rising stock market prices.
On the other hand, the trade dispute between the U.S. and the rest of the world has still not been resolved. The U.S. and Mexico were able to settle their trade dispute at the last minute, but now the American President is throwing further threats in the direction of China.
Italy, and above all the Italian banks, remains the problem child in Europe. All this could lead to volatility in the stock markets in the coming days and weeks.
In uncertain times, investors like to resort to safe havens. These include the Japanese yen. Compared with the Swiss franc, which is also traded as a safe haven, Japan has a much larger industrial base. Reason enough to take a closer look at the USD/JPY currency pair.
The USD/JPY currency pair is at an exciting point in a long-term, technical chart view. In weekly terms, the market is currently trading just below the crucial ¥108.80 zone. The MACD oscillator has formed a bearish cross.
For further rising prices, the market must break sustainably upwards through the ¥108.80 zone. If the bulls succeed, then major resistance zones could lie in the ¥111.02, ¥113.89 and ¥116.03 areas.
However, if the bear movement continues and the bulls cannot conquer the market, then support could wait in the ¥106.48, ¥103.56 and ¥101.20 areas.
USD/JPY Weekly Chart | Source: ActivTrader
Written by Daniel Schuetz, External Analyst, ActivTrades
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