Today we would take a look at the USD/JPY currency pair. This particular instrument has been more volatile in the past months and today we still expect it to remain so, which opens many opportunities.
The pair initially made some gains earlier this week on news of the Senate approving President Trump’s tax reform, which allowed the American dollar to strengthen its positions against most currencies. However, the gains for the USD were moderate and based on the daily candles, we can see the trend continue in its bearish movement that has ruled the chart over the last few weeks. With political stability and positive statistics in Japan, the yen remains steady. However, the dollar is losing out to it gradually, now because of renewed heat in Mueller’s investigation into Russia’s involvement in Trump’s election. He officially charged Michael Flynn (Trump’s ex-security advisor) and reportedly we are expecting Flynn’s testimony which is likely to incriminate Donald Trump. The whole situation is making things more difficult for the White House, who have yet to fight for their tax bill before it is finalized. This is why we expect the USD will ease off against other currencies.
In terms of the daily chart, we have a daily pivot point at 112.65 (currently the pair is trading below it around 112.50). Since we have a bearish outlook for the pair, we need to pay close attention to the nearby support levels at 112.21 and 111.92. On the other hand, if the pair breaks above the pivot, watch out for the resistances at 112.94 and 113.38. The indicators of technical analysis are giving us a buy signal for the daily chart, but a sell for the hourly one.
