Monday, August 12, 2019

USD/JPY - 12 August 2019


Fundamental Highlights

The Dollar/Yen has lost some ground as geopolitical issues keep the Yen bulls in favor ahead of a key week on the US Calendar. We have a series of Federal Reserve related events that will include Fed speakers, the Jackson Hole and the FOMC, US Consumer Price Index and Retail Sales. Meanwhile, markets are pricing in a 30 bps easing at the 19 September Fed meeting. Equities, on the other hand, are in a risk-on mood, disregarding the US-China trade tensions. This growing divergence between the Yen and equities is once again hinting that a big move is ahead of us, whether it is going to be a bullish or a bearish move, remains to be seen.

Technical Analysis

The Yen bulls took out the recent lows but the divergence between these recent lows and the equities bullish move could temporarily halt the bearish momentum on this pair. The Dollar bulls could come back in today’s session pushing price back towards 105.85 and possibly even higher if they find enough momentum. However, if the bears take out the recent lows, then 105 will be their next target.

Support: 105.30 / 105
Resistance: 105.85 / 106.50

Chart (H4)