War occurs, the advantage of USD disappears

As noted above, USD/JPY has seen a particularly steep decline over the last week+, though rates are now approaching their most oversold levels of the year. As the daily chart shows, USD/JPY sliced through its 50-day EMA and rising trend line support without so much as a momentary pause earlier this week, suggesting that a continuation down to previous-resistance-turned-support at 138.00 was likely.

As we go to press, USD/JPY is seeing its downside momentum stall so far today as it nears that support level, so a bounce back toward 139.00 or 140.00 heading into the weekend would not be surprising. That said, given this week’s big technical breakdown, the bullish medium-term technical bias of the past few months is unlikely to return unless/until the pair can definitively recapture the 140.00 handle.

While not the most likely scenario, a bearish acceleration through 138.00 support would expose the 200-day EMA around 136.50 next.

Trade active:

- The economic impact of the Sixth of October War was severe and far-reaching. The war itself was costly, with both sides suffering heavy casualties and severe damage to infrastructure. But the war also had a profound impact on the global economy, especially on the oil market.

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To the moon!

Trade closed: target reached