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Forex pairs in this Article » USD/JPY (Barcelona) - After threatening to test par (100) back on 8/23, the USD/JPY cross has tumbled all the way down to 97.09 now after spiking down to 96.81 at midnight GMT today.

The Yen has seen all the currency inflows of the current safety trade

Typically, when people say “safety trade”, it indicates the buying of Yen, US Dollars, Swiss Francs, Treasury Bonds, German Bunds and sometimes gold and silver and the selling / shorting of euros, Aussie Dollars, Canadian Dollars, stocks and sometimes crude oil. With this Syria-induced nervousness, global investors and traders decided to put on a safety trade, but it has not followed the playbook perfectly.

This time around, the Dollar has been shunned in favor of the Yen. In fact, all currencies have bowed to the Yen from that perspective. Another difference has been the rise in crude oil – which is happening due to the geography involved in this geo-political hot spot. Time will tell if this partial execution of the safety trade stays in effect - or even if the safety trade in any form stays in effect.

The action in the USD/JPY for the last four days has been quite bearish, but it was not completely unexpected by one group – the technicians.

Technical outlook for USD/JPY

The USD/JPY’s long-term outlook continues to be bearish according to technicians. They have the ultimate downside target at 92.53. Short-term support comes in at 96.81 and is followed on the downside by the 8/8 low of 95.80. Resistance for USD/JPY comes in at 97.55 in the short-term and 98.86 on a “line in the sand” basis.
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