Today we would take a look at the USD/JPY pair. The pair has been rather volatile lately, mostly due to fluctuations in the dollar.
The Japanese yen continues to react to risk sentiment on the financial markets. Right now it is not appreciating much, as there is hope that the United States and China will restart their trade negotiations. However, traders need to also beware of weakness in the USD due to the softening of the Federal Reserve’s policy, which might cause the rate to turn in favor of the yen.
The American dollar right now is caught between two very different factors. On the one hand, the ongoing trade conflict between the US and China is supporting the dollar, as the USD seems a stable currency that can withstand the shock on the markets. On the other hand, the Federal Reserve is preparing to decrease the interest rate in the country for the first time in ten years, which is weakening the dollar. This is why the day-to-day trend of the dollar has been very changeable.
In terms of the daily chart, we have a pivot point for the pair located at 107.94, with the pair trading above it currently. The support levels lie at 107.77 and 107.64, while the resistances are located at 108.07 and 108.24. The indicators of technical analysis lean towards a sell recommendation.
