USDJPY UNLIKELY TO BREAK 112.000 BARRIER! Here is WHY
A very interesting pair to trade during this ongoing pandemic, certainly USDJPY has caught the eye of many traders as both currencies acting as SAFEHAVEN. However in RISKOFF mood, the advantage certainly lies with the JPY, as the SAFEHAVEN status makes it appreciate against various counterparts such as the AUD, NZD, CAD, EURO, GBP. In the case of USD and CHF, the JPY has a bit of tussle appreciating since all are considered SAFEHAVEN assets. Looking at the bigger picture, in the RISK OFF markets the JPY certainly appreciates against the USD. For example since the pandemic began, we saw the JPY strengthen against the USD and fall to levels low as much as 105.000
In the RISKON markets, there is no doubt that the JPY weakens against various counterparts, but mostly against the USD. For example, when the global population started being vaccinated slowly, the signs of recovery in the USDJPY was quite evident, as the pair inched closer to 116.000 from lows of 105.000. A QUITE BIG RISE compared to other currencies paired with JPY.
CURRENT MARKET MOOD: SEEMS TO BE RISKOFF AND RISKON. BUT PARTICULARY SKEWED TOWARDS THE RISKOFF AS THE OMICRON FEARS GATHER PACE
Its festive season and the spread of the new variant would likely make the cases skyrocket, however as many are already vaccinated and boosters shots being administered, we should NOT expect much panic such as the one that was caused by the DELTA variant!. There are other several reasons behind to support this statement
GETTING TO THE POINT
Current market mood is mixed, that is why it could be seen that USDJPY is ranging after falling sharply on the news that south Africa has detected a new variant. There is no doubt that this festive season would make the new cases sky rocket, however as looking at all the above points, mainly the vaccines and immunity, we can expect the fatality rate to be much much lower compared to the havoc that DELTA variant caused.
Looking at the main chart, the festive season would likely cause the USDJPY price to HIT 112.000 or 113.000 area which is the lower end of the channel as the markets panic and enter the RISKOFF MOOD. But as usual the HERD IMMUNITY AND VACCINES BOOSTER ROLEOUT, would make this less threatening and markets might finally realize this and enter in RISKON mood. This would make the USDJPY price rise and possibly HIT 118.000 in 2022. However the covid 19 is highly unlikely to cause markets to enter in a long term RISKOFF mood, therefore we should expect this channel to hold and guide this pair steadily towards the 118.000 mark in 2022.
In short this pandemic has caused the markets to be so cautious, however looking at all this every large DIP in USDJPY should be seen a buying opportunity.
CHEERS AND THANKS. HOPE YOU FOUND THIS INSIGHT HELPFUL
In the RISKON markets, there is no doubt that the JPY weakens against various counterparts, but mostly against the USD. For example, when the global population started being vaccinated slowly, the signs of recovery in the USDJPY was quite evident, as the pair inched closer to 116.000 from lows of 105.000. A QUITE BIG RISE compared to other currencies paired with JPY.
CURRENT MARKET MOOD: SEEMS TO BE RISKOFF AND RISKON. BUT PARTICULARY SKEWED TOWARDS THE RISKOFF AS THE OMICRON FEARS GATHER PACE
Its festive season and the spread of the new variant would likely make the cases skyrocket, however as many are already vaccinated and boosters shots being administered, we should NOT expect much panic such as the one that was caused by the DELTA variant!. There are other several reasons behind to support this statement
- HERD IMMUNITY: since the pandemic began and up until now, the whole population has likely already achieved natural immunity and/or acquired immunity. Even as the new variant arise, our immune system are already equipped to fight off the virus
- DEATHS HAVE BEEN VERY LOW: comparing the fatality that delta variant was causing, so far if you observe the number of new omicron cases, the fatality is very very low. This is because of the HERD immunity.
- COVID 19 IS HERE TO STAY: Just like the COMMON COLD, COVID19 is here to stay with us. as it mutates and our immune system has also been equipped to fight off new strains. the COMMON COLD and COVID 19 are both classed from the same family of CORONAVIRUS. therefore the world is learning to deal and learn how to live with COVID 19.
- THE WORLD WANTS TO RETURN TO NORMAL: People are tired of lockdowns and as per the above point, are willing to live with the virus. be it using vaccines more often or just their natural immunity function. As such major financial banks are already predicting the economic recovery in 2022 and beyond
GETTING TO THE POINT
Current market mood is mixed, that is why it could be seen that USDJPY is ranging after falling sharply on the news that south Africa has detected a new variant. There is no doubt that this festive season would make the new cases sky rocket, however as looking at all the above points, mainly the vaccines and immunity, we can expect the fatality rate to be much much lower compared to the havoc that DELTA variant caused.
Looking at the main chart, the festive season would likely cause the USDJPY price to HIT 112.000 or 113.000 area which is the lower end of the channel as the markets panic and enter the RISKOFF MOOD. But as usual the HERD IMMUNITY AND VACCINES BOOSTER ROLEOUT, would make this less threatening and markets might finally realize this and enter in RISKON mood. This would make the USDJPY price rise and possibly HIT 118.000 in 2022. However the covid 19 is highly unlikely to cause markets to enter in a long term RISKOFF mood, therefore we should expect this channel to hold and guide this pair steadily towards the 118.000 mark in 2022.
In short this pandemic has caused the markets to be so cautious, however looking at all this every large DIP in USDJPY should be seen a buying opportunity.
CHEERS AND THANKS. HOPE YOU FOUND THIS INSIGHT HELPFUL
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