Good morning traders,
Another weekend goes by and another test by North Korea. This one however is a little more concerning… More from Bloomberg here:
“The yen and the Swiss franc posted the biggest gains among major currencies in early Asian trading after North Korea said it successfully tested a hydrogen bomb with “unprecedentedly big power”.”
The words North Korea, Hydrogen Bomb and Success isn’t something that you want to hear strung together when you’re enjoying a lazy weekend, but we can’t always get what we want and markets reacted accordingly on the open:
As you can see on the intraday chart, USD/JPY gapped down hard on the open, but immediately found support at Friday’s NFP inspired swing low.
Remember when nothing would overshadow an NFP Friday?
The gap fill level is marked and this level will be our barometer as to how seriously markets take this further escalation when it comes to North Korea and the threat of war.
Just keep your daily charts open for some perspective:
Even with that 75 pip gap down, USD/JPY is still trading away from swing low support and actually in a range-bound upswing.
Just don’t lose sight of the bigger technical picture in the emotion of headlines.
Best of probabilities to you!
Dane Williams – Vantage FX
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Source: Vantage FX Blog