USD/JPY Fades Pfizer Move, but May Be Ready for a Bounce

Technically, traders may see a good risk/reward opportunity near current levels.


The positive Pfizer vaccine news from last Monday caused a spike in USD/JPY, as the pair moved from 103.30 up to 105.35, a gain of 205 pips!  However, as shown by the price move in USD/JPY yesterday, positive vaccine news may already be priced into the pair.  USD/JPY opened at 104.60 and closed at 104.07, a loss of 53 pips.  Technically though, traders may see a good risk/reward opportunity near current levels.

On a daily timeframe, USD/JPY has been moving lower since the March 24th highs at 111.715 in a descending wedge formation and is currently nearing the apex of the wedge. On November 4th, the pair pushed lower through horizontal support, and tested the bottom trendline of the wedge. 

Source: Tradingview, City Index

On a shorter, 60-minute timeframe,  traders can see the large move from the bottom trendline of the wedge to the topline of the wedge.  But notice the price action after the positive vaccine news from Moderna.  Price did spike higher but was quickly faded.  USD/JPY now sits at the 61.8% Fibonacci retracement level from the low to high on November 9th.  In addition, it is sitting just above horizontal support near 104.00 and the RSI has just moved from oversold territory back into neutral territory. 

Source: Tradingview, City Index

Bulls will look to buy between 104 and 104.20, targeting the top trendline of the wedge and place stops below the horizontal support just below.  If price breaks below 104, watch for bears to sell retests of the 104.00 area, targeting the recent lows at 103.20 and then the downward sloping trendline, with stops above 104.00.


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.