The deafening news shocked the whole world yesterday: the British Queen Elizabeth II died peacefully at the age of 96…
USD/JPY has broken down key support
Information is not investment advice
The day has started with the worse-than-expected Japanese data. The preliminary GDP came out at -7.8%, while the forecast was -7.5%. It marked the third consecutive quarter of contraction. There are two types of GDP: preliminary and final. The preliminary one is the earliest one and thus tends to have the most impact. As a result, USD/JPY modestly surged after the report, but then dropped to the initial level. Traders shrugged of the negative GDP.
What’s even more interesting, the yen won the competition for the #1 safe-haven currency today amid the present dollar weakness. Indeed, investors were observing how US-China tensions were getting worse every day. Two countries delayed the meeting over the phase-one trade agreement, which was scheduled for the weekend. Their disputes have been fueled also by the current Trump’s re-election and TikTok’s ban in the USA. Therefore, investors have chosen the neutral yen instead of the greenback amid the risk-off sentiment.
USD/JPY has broken down the 38.2% Fibonacci retracement level at 106.35. Therefore, it’s likely to move down further and reach the next support at the key psychological mark at 106.00. If it crosses this level, it may fall even deeper to the 23.6% Fibo level at 105.50. On the contrary, if the pair jumps above the 50.0% Fibo level at 107.00, it will open doors towards the next Fibo level at 107.70.
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Despite the negative news and worrying headlines, we recommend traders to make mental reframing of the situation. This way, you can look at the market from a different perspective. Let’s observe how you can take advantage of the uncertainties and make the fundamentals work for you!
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