Let's take a look at the price movements for the safe-haven currencies of the US dollar and the Yen this week.
Previously the two currencies were driven by the war crisis between Russia and Ukraine that lasted several weeks and affected market sentiment.
However, after the panic subsided despite the ongoing war, investors began to react and focus on monetary policy by the Federal Reserve (Fed) and the Bank of Japan (BOJ) last week.
The Fed, which opted for policy tightening by announcing an interest rate hike, while the BOJ kept interest rates and policy loose, has given a clearer direction for price movements for the USD/JPY safe-haven currency pair.
Prices have managed to display a bullish pattern for the past few weeks and the gains that successfully continued over the weekend have surpassed the highs reached in January 2017.
The New York session last Friday saw the price rise reach a high of around 119.400, the latest high since January 2016!
The price is still showing signals to move in a bullish trend supported by the Moving Average 50 (MA50) support level on the 1 -hour time frame on the USD/JPY chart, after reaching its latest high in 6 years.
If the situation continues this week, the price is likely to cross the 120.00 level and reach another recent high around 120.500.
Even so, investors still need to be vigilant in case the price makes a surprise by plunging back down.
The nearest support level of the price is seen at the level of 118.00 before the continued decline on the bearish trend change will head back up to the 116.300 zone.
