Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. You could sustain a loss of some or all of your initial investment and should not invest money that you cannot afford to lose. CFDs are complex instruments. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

USD/JPY gains on back of US President Donald Trump’s speech

The greenback recovered past ¥109.00 after US President Donald Trump’s speech on Wednesday night.

The USD/JPY rebounded 0.69% on Wednesday (08 January) evening US time, following US President Donald Trump’s speech at the White House in which he stated that Iran ‘appears to be standing down’.

In his speech at the White House, President Trump did not indicate any further military action. He said: ‘No Americans were harmed in last night's attack by the Iranian regime.’

The greenback sunk almost 0.72% to a 12-week low of ¥107.66 overnight on Tuesday (07 January), after Iran reportedly launched two attacks on US military bases in Iraq,

The Iranian counterattack came four days after the US killing of the country’s top military official, Major General Qassem Soleimani.

Short-term bullishness

Prior to that, the currency pair had already begun to rally, due to the attacks not being as significant as first though, wrote IG UK Senior Market Analyst Joshua Mahony.

He added that a rise through Tuesday’s (07 January) peak of ¥108.63 ‘would provide a more bullish short-term view as the pair retraces the wider sell-off from ¥109.71’.

However, there is still a ‘good chance’ that there will be more dips in line with the current trend of lower highs and lows, should that barrier not be broken, he further noted.

Going by that prediction, with the major forex pair currently trading at ¥109.244 as of 08 January, 12.50am EST, a bullish trend looks to be in motion.

IG data supports this sentiment, with a 12% daily increase in the number of short trades, and a three percent drop in long trades.

An IG demo account allows investors to take advantage of rising and falling forex prices by going long or short.

Focus now on US jobs report

With fears of US-Iran conflict escalation now allayed – assuming the White House maintains its current defence stance - analysts say the focus is now on the US government’s jobs report for the month of December on Friday.

ING Chief International Economist James Knightley wrote that the November report showed job creation was better than expected, but ‘slower growth is likely in December’.

‘Moreover, labor market slack is greater than implied by the unemployment alone, meaning wage growth will remain subdued. The net result implies little upside threat for interest rates,’ he added.

Analysts at AceTrader FX said short-term impact on price movement is possible in the lead up to the release of the report, as number of interviews with Fed officials are expected.

An IG demo account allows investors to take advantage of rising and falling forex prices by going long or short.

This information has been prepared by IG, a trading name of IG US LLC. This material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. You should not treat any opinion expressed in this material as a specific inducement to make any investment or follow any strategy, but only as an expression of opinion. This material does not consider your investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. No representation or warranty is given as to the accuracy or completeness of the above information. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. Any research provided should be considered as promotional and was prepared in accordance with CFTC 1.71 and designed to promote the independence of investment research. See our Summary Conflicts Policy, available on our website.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.8 pips on EUR/USD
  • Analyze market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Live prices on the most popular forex markets

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading forex provider.

Stay on top of upcoming market-moving events with our customisable economic calendar.