Chart of the Day USDJPY
Potential reversal USDJPY
The fast-spreading coronavirus continues to grab headlines. As at today, in China, the number of people infected with the virus rose to 16,582 and the death toll was 360. On Friday (31 Jan), the US also declared the coronavirus a public health emergency within the country, one day after the WHO declared a global emergency. The Philippines has reported the first death outside China on Sunday and announced a temporary travel ban on visitors from China, including Hong Kong and Macau. Singapore on Friday also announced a ban of all new visitors arriving from mainland China.
US equities fell sharply on Friday as traders are increasingly concerned over the economic fallout of the coronavirus. The S&P 500 index and Dow Jones both dropped the most in months, by 1.8% and 2.1%, to 3,225.52 and 28,256.03 respectively. The Nasdaq Composite also slid 1.6% to 9,150.94. The major indices endured a rollercoaster ride in January, fluctuating between headlines on US geopolitical tensions with Iran, the signing of US-China trade deal and the recent coronavirus. Both the S&P 500 index and Dow Jones posted their first monthly declines in months while the Nasdaq Composite gained 2% in January, its fifth straight month of gains.
Having been closed for more than two weeks, Chinese equities opened sharply lower with major indices in China down by around 8%, as investors were given their first chance to react to the coronavirus. In a bid to support the financial system, Chinese authorities embarked on various measures, centred on cuts to short-term lending rates in a bid to inject liquidity into the system.
From a technical and trading perspective,USDJPY is now testing a key potential price reversal zone (PPRZ) just below 108.50 this area retains symmetry swing support and the yearly pivot point. A close today back through 108.80 would suggest that buyers are looking to take another run at resistance sited around 109.50 enroute to a retest of the 110.26 cycle high and on towards the equidistant swing objective sited at 110.50 a close through here would be a bullish development opening a run at the yearly first resistance pivot at 112.50
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Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!