Today we would take a look at the USD/JPY pair. While the pair began the month in a tight, almost flat channel, over the past week it has turned bearish once again.
The overall situation of the Japanese yen has not changed. There are no news regarding the Japanese economy that would lead to any strengthening of the yen. Instead, the JPY is gaining positions in its quality as a safety asset. First, there is still the ongoing trade dispute between the United States and China adding uncertainty to the financial markets. Secondly, as of last week the US is also engaged in a heated conflict with Iran. These two events are increasing investors’ interest in safety assets such as the yen.
The American dollar this week has been consistently weaker than in the past. Last week the Federal Reserve announced their readiness to lower interest rates in the United States in order to support the American economy amid the growing slowdown. Fundamental reports from the US have been lukewarm recently, largely due to the trade dispute with China, which is hurting American manufacturers. Today we await the Consumer Confidence Index from the US, which would have a high impact on the value of the dollar.
In terms of the daily chart, we have a pivot point for the pair located at 107.37, with the pair trading below it currently. The support levels lie at 107.08 and 106.92, while the resistances are located at 107.49 and 107.66. The indicators of technical analysis are confident in recommending us a strong sell position.
