Today we would take a look at the USD/JPY pair. So far in June the pair has stayed almost flat, and neither the yen, nor the dollar has managed to take over the rate.
Currently the Japanese yen is mostly neutral. The Bank of Japan is continuing with their relaxed monetary policy, as the inflation rate in Japan remains way below the target. While this normally weakens the JPY compared to other currencies, the high amount of market uncertainty has worked against that, strengthening the yen. Since the United States and China have failed to resolve their differences and reach a trade agreement, the yen remains stronger than expected.
The American dollar has also had a rather turbulent few weeks. Lukewarm fundamentals have made investors anticipate a dovish interest rate adjustment by the Federal Reserve. The central bank will be meeting this week to discuss just that, though a rate decrease is still unlikely to be implemented immediately. While this could weaken the dollar, the USD is also being boosted by its status of a safety asset. In fact, investors are looking to buy both the dollar and the yen in the current climate.
In terms of the daily chart, we have a pivot point for the pair located at 108.60. The support levels lie at 108.47 and 108.38, while the resistances are located at 108.69 and 108.82. The indicators of technical analysis are currently neutral and we need to wait for more significant signals to make a decision.
