Yen's Haven Appeal Tarnishes, USD/JPY Buoyed Above 109.00
Ming Lam June 4, 2020 6:28 AM
Assets widely expected to be safe-haven ones weakened in price amid growing investor optimism, which leads to growing risk appetite...
Overnight U.S. stocks extended their winning streak to a fourth session with the Dow Jones Industrial Average surging over 2%.
Investors were encouraged by the Automatic Data Processing (ADP) employment report, which showed that the U.S. economy lost "only" 2.760 million private jobs in May, much better than -9.000 million expected and -19.557 million in April.
Signs of abating social unrest in major U.S. cities also helped.
Assets widely expected to be safe-haven ones - including U.S. Treasuries, gold, the yen (and to some extent, the U.S. dollar) - have weakened in price amid growing investor optimism, which leads to growing risk appetite.
The yen is seeing its safe-haven appeal tarnish, as USD/JPY advanced 0.3% overnight, following a 1.0% jump Tuesday.
Also, the yen's selling pressure is expected to extend amid continued covering of USD/JPY short positions.
On an Intraday 30-minute Chart, USD/JPY has swung to the Upper Bollinger Band keeping the intraday bias as bullish.
Source: GAIN Capital, TradingView
In fact, a rising trend line drawn from June 2 remains intact.
Bullish investors can set a Key Support at 108.80, which is around the ascending 50-period moving average and the Lower Bollinger Band.
Overhead Resistance is expected at 109.30 (161.80% Fibonacci extrapolation from the Key Support), which was last seen in early April.
Above 109.30, the next resistance would be encountered at 109.60 (last seen in late-March).
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.