Today we shall take a look at the USD/JPY pair. The pair spent most of last week growing, then the yen once again took over during the weekend, and now the outlook remains a bit mixed.
Business continues as usual in Japan. The Bank of Japan announced that as of now, there is no need to loosen their monetary policy any further, despite signs of recession. Right now the most important development involving the Japanese yen lies outside of Japan; namely, the trade war between the US and China. The yen continues to benefit during times of uncertainty when it seems that the trade talks will through. There was a wave of optimism about the negotiations starting again in two weeks, but now it’s beginning to wear off.
The American dollar is currently supported by investor confidence. This week we expect GDP data from the United States. Nevertheless, the dollar will most likely be influenced by risk sentiment, just like the yen. Right now it’s gaining in value due to uncertainties about the relations with China, as well as the instability in the Middle East.
In terms of the daily chart, we have a pivot point for the pair located at 107.56, with the pair trading above it currently. The support levels lie at 107.36 and 107.11, while the resistances are located at 107.80 and 108.01. The indicators of technical analysis are confidently recommending a strong buy position.
