Today we would take a look at the USD/JPY currency pair. While things in Japan have been relatively quiet - not much is going on, the Bank of Japan is continuing with its dovish policy as expected - the United States have been rattled by political doubt, which has managed to drag the dollar down. The dollar recently reached two-month lows against the Japanese yen and seems positioned to continue the drop.
There are a number of reports we expect today regarding the American economy, such as data on consumer confidence, the Richmond manufacturing index, and more. These may increase the fluctuations in the already volatile pair, especially if the reports do not meet investors’ expectations.
In terms of the daily chart, the pivot for the pair is located at the level of 111.13, slightly above the Fibonacci 50 which is at 111.03. We expect that the pair will be moving in a bearish way, with the yen taking on the weak dollar. This means we should keep an eye on the nearby support levels to which the pair may drop - 110.81 and 110.52. Alternatively, if the dollar manages to recover and starts winning back its positions, bear in mind the resistance at 111.42 and 111.75. However, we don’t think that that is very likely today.
The indicators of technical analysis are unanimous in recommending us a strong sell.
