Yen Jolted by North Korea Ramifications
The Yen continues to pick up momentum on safe-haven trading as the North Korea situation escalates. Important support levels may continue to be tested in the coming days if safe haven trading grows among Asian investors.
Yen Attracting Safe-Haven Investors
The Yen has seen a wave of safe-haven strength this morning as the ramification from the growing North Korea tensions scare investors.
The Yen is trading near 109.50 against the U.S Dollar in early trading and may be ready to test important support.
If the U.S Dollar continues to be sold against the Yen, the next important support level for the Japanese currency could prove to be 109.00.
Yen Strength Growing
The Yen has come off major weakness since mid-July when it was near 114.00. As investors have begun to perceive the U.S Federal Reserve will be less aggressive, the Yen has been gotten stronger.
With the additional ingredient of risk adverse trading entering the trading landscape, selling of the U.S Dollar may continue against the Yen if market sentiment remains fragile.
Yen Could Test Long Term Support
The Yen is also approaching important long-term support levels. If the Japanese currency breaks below support near 109.00 and continues to get stronger it could set up a test of trading ranges not seen since October of 2016.
If North Korea geopolitical tensions continue to develop, trading in the Yen is likely to remain nervous over the next few days.
In the short term, we believe the Yen may be positive. Mid-term and Long-term we are unbiased.
Yaron Mazor is a senior analyst at SuperTraderTV.
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This article was originally posted on FX Empire