Today we would take a look at the USD/JPY currency pair. After a very sharp decline in the beginning of 2019, the price has been tentatively making its way up.
The sentiment towards the American dollar remains overall bullish. Despite a few hiccups in the fundamentals recently, the situation in the economy of the United States remains more or less rosy, with steady growth and low unemployment rates. The Federal Reserve right now views inflation to be almost neutral, which means there is no need to hike interest rates currently. Moreover, the dollar continues to rally support whenever there is uncertainty on the financial markets. Today we expect a retail sales reports from the US.
Unlike the USD, the Japanese yen is more or less neutral. The Japanese economy is on the brink of recession, with inflation stubbornly lagging behind the forecasts. The Bank of Japan is carrying on with their dovish monetary policy, so the yen does not have any internal incentives for growth. Nevertheless, whenever risk appetite is low among investors, the JPY enjoys a lot of attention and receives a boost. We need to keep an eye on the trade negotiations between China and the US for that reason.
In terms of the daily chart today we have a pivot point for the USD/JPY pair located at 110.83, with the pair currently trading slightly above it. The nearby daily resistance levels lie at 111.16 and 111.38. In case the yen manages to push the price further down, look to the supports at 110.60 and 110.28. The indicators of technical analysis are recommending a strong buy in the daily term.
