Today we shall take a look at the USD/JPY pair. There are still many question marks surrounding the future movement of this currency pair. However, at least it has managed to move past the flat range we saw throughout the month of May.
At the moment, the Japanese yen is staging a confident resistance to the dollar, which is not surprising in the current circumstances. The USD has weakened significantly due to higher risk appetite on the financial markets. Though the yen showed weakness all through last week and allowed the rate to climb to 109.52, it has since rallied and is pushing the USD/JPY exchange rate back towards the 107 level where we saw the pair trending most of the time in May. Nevertheless, because the JPY is also a safe haven asset, it’s good to remember that it too relies on market uncertainty to appreciate; so if risk appetite remains low, we might see the trend turn flat again, with neither currency taking over the other one.
As mentioned above, the US dollar is currently experiencing some weakness and is losing positions against most other major currencies. Riskier assets are profitable for the first time in a while now, so investors’ attention has wandered away from the dollar. Nevertheless, many expect that the relations between the United States and China will turn sour, as they have been worsening gradually over the last few weeks. If new sanctions or tariffs are announced, then the USD could once again become attractive to investors and increase in value.
In terms of the daily chart, we have a pivot point for the pair located at 108.79, with the pair trading below it currently. The support levels lie at 107.88 (where the pair is trading currently) and 107.33, while the resistances are located at 109.34 and 110.25. The indicators of technical analysis are currently mixed and show a neutral outlook for the pair. Stronger signals are required to make an accurate prediction. The moving averages, however, strongly recommend selling the pair.
