Today we would take a look at the USD/JPY pair. The pair opened the week with a bullish gap but seems to be fairly neutral right now.
The Japanese yen continues to be under the influence of the global market sentiment, especially when it comes to risk appetite. It appreciated when there was doubt about the trade war between the United States and China and risk appetite was low. However, as the presidents of the two countries managed to agree on a truce during the G20 summit last weekend, the markets relaxed and the yen lost some of its momentum. We have to keep a keen eye on the trade dispute in order to gauge how the yen will move.
The American dollar this week is supported by the improvement in the trade relationship between the US and China. The news was reassuring for the markets and helped boost the USD. Nevertheless, a rate cut by the Federal Reserve remains a possibility and will weaken the dollar, if implemented.
In terms of the daily chart, we have a pivot point for the pair located at 108.34, with the pair trading below it currently. The support levels lie at 108.14 and 107.91, while the resistances are located at 108.57 and 108.77. The indicators of technical analysis are confident in recommending us a strong buy position.
