Today we would take a look at the USD/JPY pair. Since the beginning of May we have seen the Japanese yen appreciate steadily against the American dollar.
The economic situation in Japan remains more or less the same, with low inflation, the ever-present threat of a recession, and an extremely dovish monetary policy by the Bank of Japan. However, the recent worsening in the negotiations between the United States and China has spiked investors’ fears of a prolonged trade conflict. This affects the global financial markets by increasing the demand for safety assets such as the JPY, hence the increase in its price.
The American dollar recently came under pressure due to disappointing inflation data from the United States. With CPI reports below target levels, investors are worried that the American economy is finally beginning to show signs of wear and tear, in part caused by the trade dispute with China, which is harming US businesses.
In terms of the daily chart, we have a pivot point for the pair located at 109.33. The support levels lie at 108.85 and 108.55, while the resistances are located at 109.63 and 110.11. The indicators of technical analysis recommend a strong sell position, as we expect the bearishness to continue.
