USD/JPY Fundamental Daily Forecast – Driven Sharply Lower by Technical “Flash Crash”

Continue to watch for heightened volatility in the USD/JPY on Thursday as investors sort through the orders. It’s hard to tell which prices actually traded during the flash crash. Traders will continue to monitor the price action in U.S. Treasurys and equity markets.
James Hyerczyk

The Dollar/Yen broke through key technical support levels early Thursday amid stock market weakness fueled by bearish news from Apple CEO Tim Cook. On Wednesday, investors took stocks down on renewed concerns over a global economic slowdown after China, the Euro Zone and the U.S. reported weaker-than-expected manufacturing data. Money flowed into the safe-haven Japanese Yen, taking the Dollar/Yen down to price levels not seen since early 2018.

At 0507 GMT, the USD/JPY is trading 107.122, down 1.763 or -1.62%.

Today’s intraday low at 105.180 stopped just short of the March 26, 2018 main bottom at 104.600. This price level is a potential trigger point for an acceleration to the downside with the November 9, 2016 main bottom at 101.179 the next major downside target.


Currency Flash Crash

Traders are saying the price action can best be described as a “flash crash”. They are also saying the move was fueled by technical factors rather than fundamental factors. The thin-holiday volumes may have exacerbated the sell-off.

U.S. Stocks Plunge on Lower Q1 Guidance from Apple

After clawing back early losses on Wednesday to post a higher close, the major U.S. stock indexes are trading lower early Thursday. The catalyst behind the weakness is a letter to investors from CEO Tim Cook which announced lower Q1 guidance. Prior to the announcement, Apple stock was halted in after-hours trading. When trading resumed 20 minutes later, shares were down about 7 percent.


Continue to watch for heightened volatility in the USD/JPY on Thursday as investors sort through the orders. It’s hard to tell which prices actually traded during the flash crash. Traders will continue to monitor the price action in U.S. Treasurys and equity markets.

Traders will be busy on Thursday with the U.S. releasing a slew of economic data.

At 1230 GMT, traders will get the opportunity to react to the Challenger Job Cuts report.

At 1315 GMT, look for a reaction to the ADP Non-Farm Employment Change report. It is expected to show the private sector of the economy added 179K jobs in December.

At 1330 GMT, Weekly Jobless Claims are expected to climb a little to 220K, up from 216K.

At 1500 GMT, the major ISM Manufacturing PMI is expected to drop to 57.7 from 59.3. This report could move the markets. Keep an eye on it. Stocks could plunge as well as the USD/JPY if this number comes in below the forecast. ISM Manufacturing Prices are expected to come in at 57.9, slightly below the 60.7 estimate.

Investors are on heightened alert so be prepared for a volatile two-sided trade.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.