Another Indicator Adding Fuel to the USD/JPY Fire! Buy the Dips
Early this morning we posted an update on our trading feed where we presented a trade idea in USD/JPY. To recap, I was thinking of buying this pair on a retrace to the 1.10 level. Of course, that wasn´t going to take place today since this pair was above 113 when I was writing.
But now it doesn´t look like we will see 110 this week either. Instead of making a long overdue pullback, the USD/JPY rallied overnight to 113.80.
One of the biggest reasons for this recent surge is the market sentiment. The market is feeling adventurous and likes the risk, hence the decline in safe haven currencies such as the Yen and the Swiss franc.
Another reason for this morning's surge in USD/JPY is Japan's wages. They fell by 0.5%, which is the fastest decline in two years.
But on the other hand, the commodity currencies are falling hard as well. Besides that, Gold and Oil have been declining too. Risk assets are declining together with safe haven instruments (JPY, CHF, Gold), so what do you make of that?
Though we don't have an answer, we only need to make pips here and there, whenever we spot good trading opportunities. The best thing to do right now is to buy dips in USD/JPY and EUR/CHF, while selling AUD/USD whenever it jumps enough to lure the sellers.
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