We should sell the pair today, since it has turned bearish.

Today we would take a look at the USD/JPY currency pair. The price of the pair has been steadily declining since the middle of December and the movement is still a bit unpredictable at the moment.

The American dollar, while by no means weak, is experiencing a bit more shock than usual. One factor influencing this is the political uncertainty in the White House. President Trump continues to keep the US government in a state of partial shutdown as he refuses to accept a budget which does not offer funding for his wall along the border with Mexico. Aside from this tense issue, there is also the marked change in the tone of the Federal Reserve. The US central bank stated in December that from now on a rate hike could come at any of their meetings, not just the four main ones, but Jerome Powell recently expressed a concern for declining economic growth globally, suggesting that a rate increase might not even happen at all this year, if the economy in the US slows down as well. Later today we expect Powell to give an important speech that may offer more clues.

On the other hand, the situation for the Japanese yen is a bit different. The Japanese economy remains in the same state as before, but the yen has once again drawn the attention of investors. In fact, right after New Year’s the JPY experienced its first flash crash for the year when investors rapidly tried to avoid risks and buy the yen, whose liquidity was low right after the holidays. For now investor interest remains the key factor behind the yen’s strengthening.

In terms of the daily chart today we have a pivot point for the USD/JPY pair located at 108.39, with the pair currently trading slightly below it. The nearby daily resistance levels lie at 108.79 and 109.40. In case the yen manages to push the price further down, look to the supports at 107.78 and 107.38. The indicators of technical analysis are recommending a strong sell in the daily term.