The Dollar/Yen is breaking out to the upside of its nearly three-week range on Wednesday after President Trump softened his comments on fresh stimulus measures Tuesday night.
Late Tuesday afternoon, Trump triggered a steep break in U.S. equity markets and drove investors into the safe-haven Japanese Yen after he cancelled stimulus talks with Democrat lawmakers. Trump’s surprise decision to call off stimulus talks until after the November 3 presidential election initiated a selling spree on Wall Street with investors bracing for fresh downside risks for an already shaky U.S. economy.
The selling stopped and sentiment improved late Tuesday/early Wednesday when Trump made a few concessions that renewed calls for stimulus. Trump said he’s willing to pass several independent coronavirus relief measures – including a new round of stimulus checks.
“If I am sent a Stand Alone Bill for Stimulus Checks ($1,200), they will go out to our great people IMMEDIATELY. I am ready to sign right now. Are you listening Nancy?” Trump tweeted.
“The House & Senate should IMMEDIATELY Approve 25 Billion Dollars for Airline Payroll Support, & 135 Billion Dollars for Paycheck Protection Program for Small Business. Both of these will be fully paid for with used funds from the Cares Act. Have this money I will sign now!” the president wrote in another tweet.
Trump’s show of support for the individual coronavirus relief comes after he rejected a proposal from House Democrats earlier Tuesday and called on congressional Republicans to hit the brakes on the negotiations until after the election.
Daily Forecast
Trump’s about face helped fuel demand for higher risk assets, driving both global equity markets and higher-yielding currencies higher.
Technically, the main range is 106.948 to 104.002. Its retracement zone is 105.526 to 105.885. After straddling this zone for about three weeks, the USD/JPY is finally breaking out to the upside after overtaking 105.885.
The daily chart indicates there is room to run with 106.550, 106.948 and 107.049 potential upside targets, but first buyers have to establish support at 105.885. If this don’t then we could resume the rangebound trade. #USD/JPY##FX#
Reprinted from Fxempire，the copyright all reserved by the original author.
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