Forex news: USD/JPY bounces on possible de-escalation in Ukraine
**iNVEZZ.com, Tuesday 4 March:**
In trading so far today, the USD/JPY has rebounded sharply from the four-week low at 101.19 reached in yesterday’s European session, after signs of possible de-escalation in the Ukraine crisis. The yen has recently been strengthening against the greenback as money moves towards safe-haven assets following the effective Russian military occupation of the Crimean peninsula in southern Ukraine.
Russia yesterday denied rumours that its Black Sea Fleet had ordered Ukrainian forces in Crimea to surrender by 03:00 UTC today or face a military assault. “This [ultimatum] is complete nonsense”, an unidentified representative of the fleet reportedly told Russian media agency Interfax, adding that no attack was planned.
In fact, news has broken today that Russian President Vladimir Putin has ordered troops involved in a military exercise near the Ukraine border to return to base at the conclusion of the exercise.
“The supreme commander of the armed forces of the Russian Federation, Vladimir Putin, gave the order for the troops and units, taking part in the military exercises, to return to their bases,” Kremlin spokesman Dmitry Peskov was quoted by Interfax as saying.
Stephen Collins, global head of dealing at London & Capital Asset Management, believes the positive news doesn’t mean that the turmoil is over, inasmuch as “Crimea and the Eastern regions of Ukraine remain extremely unstable”.
Putin is apparently scheduled to shortly – at 09.30 UTC – make a live statement on the situation in Ukraine, which will be his first public address on the issue.
On the technical front, analysts at Nomura believe that the price action favours the bulls as long as the pair remains above February’s low of 100.77.
“Prices have not recovered [from] the 102.86 breakdown from January so confirmation of a turn is mandatory to promote the bullish outlook”, the analysts believe. “The onus is on USD/JPY bulls to change the 2-month downtrend with a rally back through 101.39/102.86.”
Nomura’s Elliot wave count projects an upswing to 103.75.
Right now, the USD/JPY is fluctuating around the psychological level of 101.85, which is the 23.6 percent Fibonacci retracement of the downtrend from the start of 2014.
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