Today we shall take a look at the USD/JPY pair. The pair is bullish again and is about to form its third peak since September.
The Japanese yen is not in a position to strengthen against other currencies. To begin with, there is a widespread recession in Japan, and the BoJ is not likely to harden its stance anytime soon. Furthermore, right now there is moderate optimism on the financial markets due to the recent restart of trade negotiations between the US and China, as well as their announcement of a preliminary “phase-1” deal. Until there is conclusive news that the talks have failed, safe haven assets like the yen are going to lose positions.
Meanwhile, the American dollar is having a more or less calm week. There are no important reports this week that could sway the reserve currency, perhaps with the exception of the retail sales, which are to be published tomorrow. We also won’t hear much from the Federal Reserve this week, so it is unclear if the recent drop in inflation will prompt another interest rate cut.
In terms of the daily chart, we have a pivot point for the pair located at 108.31, with the pair trading around it currently. The support levels lie at 108.15 and 107.87, while the resistances are located at 108.58 and 108.75. The indicators of technical analysis are confidently recommending a strong buy position.
