Wednesday, July 3, 2019

USD/JPY - 03 July 2019


Fundamental Highlights

The Dollar/Yen reversed and fell yesterday after plummeting government bond yields, amid renewed fears of a global downturn sending market participants into safety. Concerns were triggered by US threat to impose additional tariffs on EU’s imported goods, which sent German bond yields to fresh record lows and US Treasury yields to multi-year lows. Earlier this morning, the Yen surged on the news that Trump nominated Christopher Waller and Judy Shelton to reshape the Federal Reserve board, the latest push in Trump’s effort to get the central bank to lower interest rates ahead of the 2020 election. The current strength in the Yen will likely continue in today’s session as EU and US traders react to the overnight Trump news.

Technical Analysis

The Dollar/Yen bears are back in control as they took out the 107.85 support level, targeting next 107.50. If the sellers manage to break below that level, then we could likely see further weakness in price towards 107.7. The bulls, on the other hand, need to break back above 107.85 to push price higher towards 108.15.

Support: 107.5 / 107.07 / 106.78
Resistance: 107.85 / 108.15

Chart (H4)