Today we would take a look at the USD/JPY currency pair. The dollar has managed to push the rate of this pair up, but it is still experiencing a lot of volatility.
The American dollar is still doing well. Despite somewhat lukewarm statistics regarding inflation published recently, confidence in the American economy and their currency remains strong. The Federal Reserve is well-poised to increase interest rates very soon, and another hike in December is all but confirmed. Moreover, the USD’s value is being pushed upward by investors looking to avoid risks on the financial markets currently stemming from the trade wars and the crises in emerging markets. This is why our long-term perspective for the dollar is bullish.
The Japanese yen, although usually a safe-haven asset in its own right, is not able to keep up with the dollar. Yesterday the Bank of Japan left interest rates and bond yield targets unchanged, as expected. The Japanese economy is struggling with low inflation but right now it is not clear what measures the BoJ would take to support the economy. We expect the yen to remain bearish.
In terms of the daily chart today we have a pivot point for the USD/JPY pair located at 112.30, with the pair currently trading slightly above it. We expect the rate to continue rising, so look towards the nearby daily resistance levels at 112.43 and 112.58. In case the yen strengthens, look to the supports at 112.15 and 112.02. The indicators of technical analysis are recommending a strong buy in the daily term.
