Today we shall take a look at the USD/JPY pair. Since last week, the pair has been steadily bullish and today it reached 2-month highs.
The economic situation in Japan remains unchanged. Today the Bank of Japan published their Tankan survey, which showed the worst results for the last six years. The survey is indicative of the overall mood in Japan’s industrial sector, one of the main drivers of its economy. Inflation remains abysmally low, despite the BoJ’s loose monetary policy. Therefore, the yen lacks domestic incentives to strengthen. Instead, the JPY relies entirely on international market fears for support.
The American dollar, on the other hand, remains strong. Despite a recent interest rate cut, the USD continues to be the best performing currency in the world. It has not been affected by Trump’s impeachment scandal at all. Moreover, if negotiations between China and the United States falter once again, we expect to see the dollar strengthen even further.
In terms of the daily chart, we have a pivot point for the pair located at 108.00, with the pair trading above it currently. The support levels lie at 107.82 and 107.57, while the resistances are located at 108.25 and 108.43. The indicators of technical analysis are confidently recommending a strong buy position.
