Yen bears fail at big hurdle

18 April, 2017

USD bulls have managed to claw back some ground in the market today as the dollar was buoyed by positive market sentiment for the US economy and some risk appetite after the Easter season. For large market movers this was apparent for the USDJPY as it looked to claw back some of the ground after last week's big move below the 200 day moving average. The market as a whole has treated the Yen as the ultimate hedge for recent global unrest and uncertainty, and if we see more of this then we could see larger drops in the long run for the USDJPY. But for now sellers of the USD against the Yen seem to have run out of steam and this, in part, is on the back of technical's as well, which remain quite strong.

The 200 day moving average is currently acting as dynamic support in the market, and traders on shorter time frames will be looking to push lower on any bearish movement towards it. However the bears have had their time to shine and have failed to push the USDJPY below the 200 day moving average. Targets higher will be around 110.139 for the first level of resistance and 111.655 after that. I would anticipate we will see further large movements in the long run, especially if we see continue strong US fundamentals and some resistance from the BoJ from the strengthening Yen.

Gold has been a strong player in recent weeks as the Trump election causes headaches for markets, and as fears of war disrupting the global economy also linger. As a result the gold bulls have been pushing the price higher, and this comes on the back of the likelihood of interest rates being lifted further in the near future. However today it has come against some resistance for a change as it struggled to break through the bearish trend line that has been in play since July 2016. This trend line is quite apparent, and should come as no surprise to markets traders who would have been targeting this level over the past week - all eyes will now be on it to see if does indeed stop further movements higher.

With gold so far failing to break through the $1290 level we could see some profit taking from the market, especially as jaw boning over North Korea comes with less weight than previously. With that in mind, traders may look to target lower support levels with an emphasis on $1275 as the first level and the next leg down being at $1263. The 20 day moving average is also worth noting, as markets have made a habit of playing of this level with strong trending markets, so if it does become bearish it may support the bears in the short term while they look to make some ground. 

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