Today we shall take a look at the USD/JPY pair. Since February, this pair has been locked in a bullish trend. Over the past two weeks there were some slight hiccups and corrections, but last week the upward movement kicked off again and right now the pair is trading at the highest level in a year, around 110.40.
There are currently no factors that could work in favor of the Japanese yen. The yen is typically known as an investment safe haven, but even in times of trouble, it is failing to attract the interest of investors. The coronavirus pandemic is once more plaguing the markets, as things take a turn for the worse in continental Europe, South America, and the Indian subcontinent. Yet, the JPY is not gaining any ground due to these problems because investors seem to have more trust in the dollar where the pandemic is concerned. We expect the Japanese yen will have no say in the movement of this pair for the foreseeable future.
Instead, the US dollar will determine how the USD/JPY will trade. Thanks to the economic recovery that the United States is currently experiencing, the dollar is a well-supported currency. US Treasury yields have paused their climb for now, yet the dollar index continues to grow in a testament to investors’ massive confidence in the reserve currency. The worries over the pandemic are further inspiring trust in the dollar. Upcoming fundamentals such as the March non-farm payrolls may offer a further boost to the greenback.
In terms of the daily chart, we have a pivot point for the pair located at 109.67, with the pair trading above it currently. The support levels lie at 109.48 and 109.18, while the resistances are located at 110.16 (overcome) and 110.45. The indicators of technical analysis agree in strongly recommending a buy position today.
