Today we would take a look at the USD/JPY currency pair. The pair continues to increase steadily.
Despite global worries over the trade wars that President Trump is trying to wage against China, Canada, Mexico, and the European Union, the fundamentals of the American dollar remain solid, pushing it up against a basket of major currencies. This week the markets were reassured by Federal Reserve Chief Jerome Powell, who showed the Fed is confident that the American economy can absorb any political shock with relative ease. Because of the Fed statements analysts expect two more interest rate increases, one in September and one in December, which would further tighten the monetary policy and support the dollar in the long term.
There isn’t much to discuss in terms of the Japanese yen: although it typically appreciates at times of trouble and uncertainty, this time around the USD has been strong enough not to lead traders towards safe haven instruments like the yen. The Japanese currency doesn’t have many incentives for growth, considering the dovish policy of the Bank of Japan. Today we do expect a trading report for June but it is not likely to change the course of the pair.
In terms of the daily chart today we have a pivot point for the USD/JPY pair located at 112.89, with the pair currently trading slightly above it. We expect the rate to stay up today, so look towards the resistances at 113.06 and 113.31. In case the dollar starts losing to the yen, beware of the nearby support levels at 112.64 and 112.47. The indicators of technical analysis indicate a strong buy signal right now and the moving averages agree.
