Today we would take a look at the USD/JPY pair. This pair has been much less volatile in the last ten days than we’d normally expect and is trading in a very narrow range between 112.20 and 111.70.
The Japanese yen is currently (somewhat surprisingly) resisting the dollar and managed to push the price below the level of 112. There have not been any changes from within Japan, and the Bank of Japan is holding their dovish monetary course steady, so the yen is not reacting to internal factors. Rather, it is benefiting based on risk sentiment. Unless any stronger factors affect the dollar and push it further in one direction or another, or central banks around the globe surprise the markets with rate hikes (which is highly unlikely right now), the yen will hold its ground in the current economic climate.
The American dollar lately has been giving off a more mixed vibe than usual. Yesterday the US published their home sales report for March which was lower than expected. Today we are awaiting two more housing reports, but more importantly, on Friday data on the US GDP for the first quarter of 2019 will be published, and that will be the strongest indicator regarding the health of the American economy. Right now there is a strong risk aversion bias on the market, which is boosting both the dollar and the yen.
In the weekly term, we should keep an eye on the pivot point located at 111.96. There is a slight bullish bias for the pair this week, so watch out for the resistances at 112.15 and 112.36. If the bears prevail again (especially on negative data from the US), look to the support levels at 111.75 and 111.56. In the medium term, the indicators of technical analysis recommend a strong buy position.
