Today we would take a look at the USD/JPY pair. The pair remains volatile as the markets experience a lot of mixed signals lately.
The Japanese yen remains the most popular safety asset out there. Right now both the instability in the Middle East and the ongoing trade war between the United States and China are stressing out the financial markets. This, in turn, leads to an increased investor interest in the yen, keeping its value steady. Fundamentals from Japan continue to be mediocre; today’s publication of the July trade balance was worse than expected, for example. Yet even this cannot weaken the yen significantly.
The American dollar is also experiencing mixed influences. Recent fundamental reports from the United States show inconclusive results about the economy. On the one hand, wages are growing, which President Trump has used to dispel recession fears. On the other hand, there is a marked slowdown in the industrial sector, which has been hard-pressed by the trade conflict with China. Tomorrow the Federal Reserve will publish their most recent minutes that could reveal whether the central bank is considering a further loosening of monetary policy.
In terms of the daily chart, we have a pivot point for the pair located at 106.53, with the pair trading below it currently. The support levels lie at 106.36 and 106.08, while the resistances are located at 106.81 and 106.98. The indicators of technical analysis recommend a strong sell in the daily term.
