Today we would take a look at the USD/JPY currency pair. The pair spent the first half of May climbing upward, but since about a week ago it turned to a decline once again.
The American dollar continues to surge to yearly highs. Even though the latest data from the Federal Reserve was not quite as what investors had hoped for, the USD still managed to retain its positions. Moreover, the dollar gained in price due to increased volatility in the price of oil and other fuels. Today we expect a PCE inflation report, which is set to see inflation around 2% yoy.
The situation in Japan is quite different. The economic reports coming from Japan have not been favorable to the yen, and we do not expect much change since there are no important announcement coming out today. However, the yen is a popular safety asset, so we could see it gain in value due to the tensions regarding the trade dispute between the US and China, as well as the developing story in Italy.
In terms of the daily chart today we have a pivot point for the USD/JPY pair located at 108.77, with the pair currently trading above it. If the pair remains above the pivot, look towards the resistances at 109.21 and 109.52. We expect the price to decrease, however, so plan around the support levels at 108.46 and 108.02. The indicators of technical analysis agree on a strong sell signal.
