Today we would take a look at the USD/JPY pair. Since last week, the exchange rate has turned bullish once again and is currently at a 2-month high.
There are currently no significant economic reports coming from Japan that can influence the JPY. The Bank of Japan has demonstrated their commitment to a dovish monetary policy and are not likely to change it anytime soon, based on the persistently low inflation in Japan. Instead, the yen is supported whenever there is market uncertainty. However, during the past week or so there has been an increase in risk appetite, so the JPY has weakened.
The American dollar, on the other hand, is strengthening right now. Despite a deteriorating situation on the US labor market, other reports from the States are still good and investors can no longer expect a massive 50-point decrease in interest rates by the Federal Reserve, like expected earlier. Today Jerome Powell, Chairman of the Federal Reserve, will give a speech regarding monetary policy, but the markets more or less know what they’re going to hear.
In terms of the daily chart, we have a pivot point for the pair located at 108.61, with the pair trading above it currently. The support levels lie at 108.41 and 108.09, while the resistances are located at 108.93 and 109.13. The indicators of technical analysis are confident in recommending us a strong buy position.
