USDJPY Slides After US President Trump Tries to Assure the Public of Coronavirus Threat
With coronavirus cases aggressively rising outside of the epicenter China, equities and other higher-yielding assets have been heavily sold off. US President Donald Trump thought it would be a good idea to assure the public and investors. However, judging by the price action on USDJPY it did not seem to have worked. The currency pair fell from 110.44 to 110.17 following the President’s news conference. As of this writing, USDJPY is trading around the 110.00 psychological handle.
President Trump acknowledged the possibility that the US may soon see more cases of the coronavirus. However, he downplayed the potential effects of the infection by saying that the “risk to the American people remains very low.” A few politicians have called for Trump to set aside funding to combat the virus. He has not approved an additional budget for it but said that the government is “very, very ready for this, for anything.” He has also appointed US Vice President Mike Pence to oversee the government’s response to the coronavirus.
The US has 15 confirmed cases with one person left hospitalized, 8 have gotten clearance to be discharged, and 5 being fully-recovered. There is one patient who has not travelled anywhere or had any contact with people who have come from China.
USDJPY is currently testing a confluence of support around the 110.00 handle. On the 4-hour time frame, we can see that the currency pair is finding support around the 100 SMA and 200 SMA.
Then, zooming out on the daily time frame, we can also see that the price coincides with the previous highs on USDJPY. It also aligns with the 50% Fib level when you draw the Fibonacci retracement tool from the low of February 3 to the high of February 20. A bullish close above yesterday’s high at 110.69 could indicate that USDJPY may soon rally to its February highs at 112.22. On the other hand, a close below this week’s low at 109.88 would invalidate support at the SMAs. It could mean that there may be enough sellers in the market to push USDJPY to 108.80 where it could test support at the rising trend line (from connecting the lows of August 28. September 3, January 6, and February 3).More content