Today we would take a look at the USD/JPY pair. The pair was declining all week but today it opened in the green for the first time in seven days.
Business continues as usual for the Japanese yen. The ultra-soft monetary policy of the Bank of Japan is keeping the yen weak, but the constant influx of stress and uncertainty in the global financial markets prevents it from weakening too much. Last week the USD/JPY pair turned downward to a large extent because of the deterioration in the trade talks between the US and China and the interest rate decrease implemented by the Federal Reserve. This week the yen has to compete for dominance with the USD once again, as both currencies in this pair are considered reliable safety assets.
The American dollar is doing remarkably well, despite an interest rate decrease implemented by the Federal Reserve last week. While dovishness typically weakens currencies, investors are not sure we would see any further monetary policy loosening, and therefore expect the dollar to remain strong. It’s also attracting a lot of investor interest because of its safety asset qualities, so at least for now the trend for the USD is to strengthen.
In terms of the daily chart, we have a pivot point for the pair located at 105.92, with the pair trading above it currently. The support levels lie at 105.22 and 104.82, while the resistances are located at 106.31 and 107.02. The indicators of technical analysis recommend a strong sell in the daily term.
