Today we would take a look at the USD/JPY currency pair.
Consulting our fundamental factors first, not much is going on in Japan. Ever since Prime Minister Shinzo Abe confirmed his continued rule in a recent election, the Bank of Japan has reaffirmed its commitment to a massive stimulus program to fight Japan’s economic recession. Nevertheless, the pair is influenced by the dollar’s current weaknesses - the political background in the United States proves to be quite rich in negative factors. The US Senate is divided over Trump’s tax reform and tensions are likely to continue, since its adoption is expected to be quite a long process. The Federal Reserve is also undergoing changes as many seats would be free for new appointments soon and Yellen will hand over the leadership post to Powell in March. These factors are weakening the USD, and with that the USD/JPY pair has managed to turn bearish.
On the daily chart today we have a pivot at 111.62. The pair is currently trading below it at around 111.22, so we expect the yen will be able to push the dollar further down to the nearby resistances at 110.74 and 110.26. If the USD makes a recovery and the pair breaches the pivot, then stay alert about the resistances at 112.10 and 112.98.
The indicators of technical analysis are unanimous in giving us strong sell signals.
