Greenback On The Ropes, USD/JPY Nears Macro Support - Forex News by FX Leaders

Greenback On The Ropes, USD/JPY Nears Macro Support

Posted Monday, April 19, 2021 by
Shain Vernier • 2 min read

The U.S. dollar is in a freefall today, losing significant marketshare vs the forex majors. With only a few hours left in today’s session, the EUR/USD (+0.45%), USD/CHF (-0.50%), GBP/USD (+1.14%), and USD/JPY (-0.57%) have all been extremely active. One of the only bright spots for the Greenback has been the USD/CAD (+0.24%) which has bounced despite surging oil prices.

At this point, it’s unclear as to what has sent the U.S. dollar south. This morning brought a muted economic calendar, headlined by the weekly U.S. treasuries auctions. Both the 3 and 6-month T-bills saw modest action. Yields held firm, with only the 3-month T-bill posting a 0.005% gain. 

With such a quiet economic calendar, one has to question the weakness in today’s U.S. asset pricing. One reason may be expected U.S. social unrest in the coming days. Today marks the closing arguments in the Officer Derek Chauvin trial, in Minneapolis, Minnesota. The trial has been a political lightning rod, prompting the threat of widespread riots, protests, and further civil unrest. At this point, jury deliberation is scheduled to begin in the next 24 hours. It is unclear how long the jury will be out, but a verdict is expected later this week. At this point, investors may be preparing for a period of uncertainty stemming from the trial’s final decision.

Aside from gold, the safe-haven currencies are performing well vs the Greenback. Let’s dig into the USD/JPY technicals and see where this market stands.

USD/JPY: Technical Outlook As The Greenback Fades

In a Live Market Update from last Thursday, I issued a buy recommendation in USD/JPY from a key 38% Fibonacci support level. This technical area is quickly coming into play as the Greenback’s value continues to trend south.

USD/JPY, Daily Chart

Overview: At this point, it may shape up to be a wild week for the Greenback and the financial markets. In the event that the Chauvin decision creates widespread riots and upheaval in the U.S., the chaos may spill over into the markets. If this is the case, be ready for safe-havens and the USD/JPY to experience enhanced volatility.  


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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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