Today we shall take a look at the USD/JPY pair. Since the beginning of January, we have seen a steady increase in the value of this pair.
The Japanese yen is currently relaxing in price due to the low demand for safe haven assets among investors at the moment. Thanks to the de-escalation of the US-Iran conflict, as well as the successful signing of a phase-one trade agreement between China and the United States last week, the markets are optimistic, and so traders favor riskier assets such as the Australian dollar, for example. The lower demand for the yen is allowing the USD to appreciate against it, a trend that will continue until we run into another conflict.
The American dollar is also dropping in demand, incidentally, because it, too, serves as a safety asset in times of trouble. The high risk appetite among investors is not boosting the dollar at the moment. However, the USD remains supported by excellent fundamentals from the United States and healthy inflation, which cannot be said of Japan. Moreover, the Federal Reserve is not likely to lower interest rates any further, so the dollar will most probably remain stable.
In terms of the daily chart, we have a pivot point for the pair located at 110.17, with the pair trading a bit below it currently. The support levels lie at 110.12 and 110.06, while the resistances are located at 110.23 and 110.28. The indicators of technical analysis recommend a strong buy position today.
