Tuesday, November 20, 2018

USD/JPY - 20 November 2018


Fundamental Highlights

The Dollar/Yen continues its downward trend as weakness from the US Dollar continues. The US Dollar continues to weaken as investors digest Friday’s dovish comments from the Federal Reserve’s Vice Chair, Richard Clarida. Clarida pointed out that the US interest rate environment is approaching a neutral state and he believes that a neutral state is what makes sense. He also mentioned that a neutral state is defined by interest rates between 2.5% and 3.5%. The fact that interest rates will be at 2.5% by the end of this year means that it is very unlikely for the Fed to increase interest rates more than three times next year. Adding to the misery for the Dollar/Yen pair, the pair is also being pressured by a drop in the performance of US stock indices as a selloff in stocks deteriorates sentiment and drives investors into buying the safe haven yen. For today, investors need to focus on the different set of US housing data and the performance of US stocks.

Technical Analysis

The Dollar/Yen remains in a downward trend with all three major moving averages pointing lower. The next leg lower will be triggered by a break below the 112.42 support exposing the next support level at 111.95.

Support: 112.42/ 111.95
Resistance: 113.28 / 113.65

Chart (H4)