Today we would take a look at the USD/JPY pair. The pair spent last week growing in price, but today it began decreasing again.
There are no surprises regarding the Japanese yen. The Bank of Japan today stated that they remain committed to a loose monetary policy. While they did not adjust the interest rate, they are ready to do so if both inflation and growth continue to be so stagnant in Japan. However, the JPY is benefitting from the market uncertainty due to its safety asset quality. The trade conflict between the US and China remains, and now there is also increased volatility due to the negative developments with Brexit.
The American dollar right now is mostly negative. The Federal Reserve is currently meeting to discuss whether to lower interest rates for the first time in a decade. A rate decrease of 25 basis points is expected to be announced tomorrow. However, investors expect that the dollar won’t weaken significantly by this because it’s been anticipated for a while now and is likely already reflected in the current value of the USD.
In terms of the daily chart, we have a pivot point for the pair located at 108.73, with the pair trading below it currently. The support levels lie at 108.56 and 108.26, while the resistances are located at 109.03 and 109.20. The indicators of technical analysis recommend a strong buy in the short term.
