Today we shall take a look at the USD/JPY pair. So far in October, the pair’s movement has been quite erratic, with both gains and losses.
The primary reason the Japanese yen is able to resist other currencies from time to time is that the yen is a safe haven asset. The JPY strengthens each time the markets are under pressure due to geopolitical factors and other trouble that tends to spook investors. However, the United States and China are meeting again this week to try to reach a trade agreement. As long as investors remain optimistic about a plausible end to the trade conflict, we could see weakness in the yen. The JPY will lose even more positions if the Bank of Japan adjusts its monetary policy to address the recession in the Japanese economy.
The American dollar’s course is also not always certain. In general, the economy of the United States remains steady, and the USD is the strongest currency in the world. Nevertheless, fundamentals have been mixed recently, and the Federal Reserve is experimenting with rate cuts. In the short term, the dollar is vulnerable to small changes in both directions.
In terms of the daily chart, we have a pivot point for the pair located at 107.13, with the pair trading below it currently. The support levels lie at 106.80 and 106.37, while the resistances are located at 107.57 and 107.89. The indicators of technical analysis are confidently recommending a strong sell position.
