Monday, July 22, 2019

USD/JPY - 22 July 2019


Fundamental Highlights

The Dollar/Yen recovered on Friday and continues to recover this morning on diminishing hopes for aggressive US rate cuts. However, US equities plummeted on that same news which could impact negatively on the Dollar once risk aversion sentiment is back in the market place. Additionally, Iran seizing a UK oil tanker during the weekend, reportedly being on international waters, could also make the anti-risk Yen favorable over the greenback. Early Friday, Japan released its import and export data, both declined more than anticipated as a consequence of the trade war led by the US, which could dent the market participants’ risk appetite. Today, BOJ’s Governor Kuroda is due to speak at the IMF, in Washington, as traders will be waiting for any comment regarding the monetary policy.

Technical Analysis

The Dollar/Yen recovered after it found support at 107.20s but currently the bulls are facing resistance around 108, where we can find both the 50 and the 200-day moving averages. With the path of least resistance favoring the bears, if they find enough momentum they could pull the price back towards 107.80 or even 107.60 for a retest. On the other hand, the bulls need to break above this strong resistance level for a possible 108.35 retest.

Support: 107.80/ 107.60
Resistance: 108.1 / 108.35

Chart (H4)