How the Corona Virus Concerns Impact USDJPY? The Dollar pulled back against the Yen yesterday following the global equity markets on coronavirus scare. Will the Corona Virus have a short-term or long-term affect on the financial markets?
January 22, 2020 | SQUARED DIRECT – History shows us that these kind of events such as the Corona Virus, due have an effect on the financial markets. USD went down, but for the Japanese Yen it was the perfect opportunity. Since the JPY bulls opened up the opportunity for traders to buy the USDJPY dip.
USDJPY Analysis: Corona Virus Concerns Impact USDJPY
Based on past historical events which are similar to the Corona Virus, the impact of such events usually have a short-term impact only on the financial markets. This also reflects in the S&P500 futures today. After the Corona Virus scare on the global equity markets yesterday, today the S&P500 futures are once again the positive territory. This signals that there is risk reset in the financial markets. Hence, traders should pay attention and check if equities continue to rise, then USDJPY will likely follow higher.
Looking at the technicals, the Dollar found support at the 109.80 support and bounced back above the 110 critical level, opening doors for further upside. The bulls will be looking to take out the 110.30 resistance level to accelerate the gains towards the 110.60 level. The bears, on the other hand, need to do more damage (below 109.70) to potentially reverse the trend. We have summed up below our levels again for you to pay attention to:
Support: 109.80 / 109.70
Resistance: 110.30 / 110.60
This concludes USDJPY analysis. Benefit of USDJPY’s volatility this week. If you don’t have a trading account yet, then you can simply open a trading account with Squared Direct.
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