Correlation between USDJPY and gold | 01 May 2020

01 May 2020, USD/JPY

Correlation between USDJPY and gold

USDJPY trading plan:

The LIBOR rates on U.S. dollar loans are falling in the London interbank market. This is positive signal for Japanese yen, since excess dollar liquidity has a negative effect on the exchange rate of the U.S. dollar. The interest rate on a three-month loan in U.S. currency in London is 0.686%. Investors are increasing their short positions in the precious metals market. This is a negative signal for the Japanese yen, as the currency pair correlates with gold. The yellow metal has steadily declined on signs that more than half of the 50 U.S. states that had been on lockdown from the pandemic were reopening in stages, diminishing the potential for the safe haven.

Trading recommendation: range 106.65 -107.65.

David Johnson
Analyst of «FreshForex» company
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