Could Omicron Cause USDJPY To Stall At 115.000 ?
Its a thin trading week with no concrete markets drivers scheduled. With low liquidity, this pair has been inching closer to the next psychological resistance of 115.000. This level has been rejected on 3 occasions on the recent trend and the current wave would likely represent the 4th test of this concrete resistance!
Based on the technical picture, the USDJPY is in the long term uptrend, however the 115.000 psychological barrier needs to be broken convincingly. To do so, the Monthly candle needs to pierce and close above 115.000 mark. This would give a precise indication that indeed this level has been cleared and the price can aim higher.
Fundamentally, this pair is mainly driven by the Covid 19 pandemic in the last couple of years. With the discovery of the new variant Omicron, which is now the dominant strain around the globe we can expect the cases to rise rapidly in the coming weeks, as people gather and celebrate during this holiday season. With various statistics confirming that the omicron variant is far less fatal than its predecessor the "delta variant", there is still fear that the high infection rate and cases could again overwhelm the medical industry especially the hospitals!
PREDICTION FOR THE COMING WEEKS ?
As people gather and celebrate the holiday season, the variant would likely cause the infection rate to spike, which would likely be evident in the coming weeks as the cases might soar. Even with the vaccinations ongoing, the immunity that it provides is only temporary. So how would the market react? as usual the demand for safehaven would return thereby making JPY appreciate. But the demand for JPY or safehaven would not be that high, as this variant is less fatal due to many factors. Therefore USDJPY might test and reject the 115.000 level and fall towards the ascending channel trendline or support of 113.000 area. But 112.000 will likely not be broken and this DIP would be seen as the buying opportunity that the traders have been waiting for.
Cheers, I hope you found this insight helpful. Happy holidays
Based on the technical picture, the USDJPY is in the long term uptrend, however the 115.000 psychological barrier needs to be broken convincingly. To do so, the Monthly candle needs to pierce and close above 115.000 mark. This would give a precise indication that indeed this level has been cleared and the price can aim higher.
Fundamentally, this pair is mainly driven by the Covid 19 pandemic in the last couple of years. With the discovery of the new variant Omicron, which is now the dominant strain around the globe we can expect the cases to rise rapidly in the coming weeks, as people gather and celebrate during this holiday season. With various statistics confirming that the omicron variant is far less fatal than its predecessor the "delta variant", there is still fear that the high infection rate and cases could again overwhelm the medical industry especially the hospitals!
PREDICTION FOR THE COMING WEEKS ?
As people gather and celebrate the holiday season, the variant would likely cause the infection rate to spike, which would likely be evident in the coming weeks as the cases might soar. Even with the vaccinations ongoing, the immunity that it provides is only temporary. So how would the market react? as usual the demand for safehaven would return thereby making JPY appreciate. But the demand for JPY or safehaven would not be that high, as this variant is less fatal due to many factors. Therefore USDJPY might test and reject the 115.000 level and fall towards the ascending channel trendline or support of 113.000 area. But 112.000 will likely not be broken and this DIP would be seen as the buying opportunity that the traders have been waiting for.
Cheers, I hope you found this insight helpful. Happy holidays
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