Today we shall take a look at the USD/JPY pair. Up until now in November, the dollar has struggled to keep up the pressure on the Japanese yen, so we see the pair fighting to go lower.
There continues to be a lack of domestic factors that could bolster the Japanese yen. The fundamental reports coming from Japan still paint a grim picture of the country’s economy and the Bank of Japan is unlikely to have a change of heart anytime soon. Moreover, with the prospects of a trade deal between the United States and China still being relatively high, there is not much demand for safety assets at the moment. The JPY’s strengthening is most likely just a temporary consolidation and we expect the dollar to take over again.
This week there isn’t much going on for the USD. The only important event is the release of minutes from the Federal Reserve’s most recent policy meeting, which is going to be published tomorrow. The most plausible explanation as to why the USD is giving up ground to the JPY at the moment is that the positive developments in the US-China trade negotiations are inspiring risk appetite and there is less USD buying among investors right now. However, the reserve currency is always popular, so the dollar will likely be in the spotlight again soon.
In terms of the daily chart, we have a pivot point for the pair located at 108.75, with the pair trading below it currently. The support levels lie at 108.43 and 108.19, while the resistances are located at 108.99 and 109.31. The indicators of technical analysis are mixed, but lean towards recommending a sell position today.
