Wednesday, November 6, 2019

USD/JPY

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Fundamental Highlights

The bullish momentum on the US Dollar continued yesterday as it increased the pair as high as 109.25 amid investors’ euphoric expectations towards the trade deal optimism. However, the greenback started to fall back earlier today, following the decline in the S&P 500 futures, as China demanded from President Trump to remove tariffs in order to continue talks. Further, the minutes of BOJ's September rate review released earlier today highlighted the rift between the board members on the next move, possibly adding to the bid tone around the Yen. Notably, members were worried that additional stimulus increases the risk of hurting financial institutions’ profitability and drives excessive risk-taking. Looking forward, the pair will likely continue taking cues from the action in the equities and Treasury yields.

Technical Analysis

The Dollar-Yen continued to move higher as it finally reached an important resistance level, 109.29, which is the recent swing high. A break above this level will be significant for the bulls as it could squeeze shorts excessively by ramping the Greenback towards 109.60 in no time. The bears, on the other hand, need to put pressure on the bulls around this critical resistance area in an attempt to push price blow 108.90 to retest the 50-day moving average.

Support: 108.90 / 108.70
Resistance: 109.29/ 109.60

Chart (H4)
USDJPY