Today we would take a look at the USD/JPY currency pair, one of the favorite pairs among traders. After steadily dropping at the end of 2017 and earlier this year, since April the USD has been appreciating against the yen, pushing our pair downwards.
The American dollar has had a somewhat quieter week, as most reports confirmed investors’ expectations. Overall the economic statistics continue to be good and analysts are confident that the Federal Reserve is preparing for another interest rate increase, most probably in early to mid-June. The political factor of North Korea threatening to cancel the summit with Trump on June 12 has also not been a major factor yet. The dollar is likely to remain strong, especially on the background of weaker data from the rest of the world.
In Japan it appears that the economic situation has worsened. Inflation is missing the Bank of Japan’s targets and recent GDP data was disappointing. Japan has been struggling on the verge of recession for many years. To address these issues, BoJ President Kuroda spoke about plans by the government to implement more reforms and likely deregulate some sectors of the Japanese economy in order to create a better economic climate. Later today we expect some very important releases on inflation for April which would likely add volatility to the pair.
In terms of the daily chart today we have a pivot point for the USD/JPY pair located at 110.27. We expect the pair to remain bullish for now, so pay attention to the nearby resistance levels at 110.52 and 110.66. If the pair drops below the pivot, then look for the support levels at 110.13 and 109.88. The indicators of technical analysis unanimously agree on a strong buy signal.
