The Japanese yen is rocketing higher today.
Weeks ago, I heard rumblings from some traders that the yen was no longer a safe haven currency due to COVID-19’s impact on Japan.
I wasn’t one of those traders.
The way the USDJPY was acting at the end of February indicated that the yen was still very much a flight to safety currency.
Of course, USD weakness helped the pair along.
We even saw the risk-sensitive USDJPY confirm a massive false break on February 27th.
Since closing below that 109.80 level on the 27th, the USDJPY has lost more than 700 pips.
As for GBPJPY, the pair hasn’t suffered nearly as much given the pound’s strength relative to the US dollar.
But the yen is having its way with the pound regardless.
If GBPJPY closes the day below that 135.50 level, I would expect it to begin serving as resistance going forward.
As for key support on the way down, keep a close eye on 130.70, followed by 126.70.
Notice how 130.70 served as a pivot for the GBPJPY between August and October of last year.
126.70 is, of course, the 2019 low.
On the other hand, if GBPJPY manages a close back above that 135.50 handle, it would keep the level intact as support a while longer.
Remember that I use New York close Forex charts so that each 24-hour daily session opens and closes at 5 pm EST.
Go here to get access to the same Forex charts I use.
All in all, though, I favor more losses across the yen pairs given recent trends and the introduction of a risk-off environment.
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