Ahead of the release of US economic growth figures later in the day, the USD/JPY is attempting to bounce back up to 109.78 at the time of writing, after bearish pressure pushed the pair to test the 109.14 support level. The correction will be higher if the price is established above the psychological resistance at 110.00. The pair has recently shrugged off a rise in US consumer confidence stronger than expected, buoyed by the strong US economy. On the daily chart below, the pair breaking below the 109.00 support level will increase the selling and the pair will test stronger bearish levels. Overall gains remain stronger for the Japanese yen as one of the safest safe haven for investors as the fierce US-China trade war has been brewing recently. There are factors that support the gains of the dollar, and the Japanese yen's recent gains are likely to evaporate at any time with any positive development of the current US-China trade war.
Despite the contents of the latest US Federal Reserve meeting minutes, some members of the bank's policy to raise interest rates, which is positive to the dollar, but the pair declined as the Japanese yen's strong gains returned as a safe haven amid growing investor fears of a widening US trade wars - especially with China after the US sanctions on the Chinese giant Huawei.
The US economy managed to add new jobs more than expected, the unemployment rate fell to its lowest level in 49 years and the average hourly wage rose.
The Federal Reserve Board kept the interest rate unchanged as expected, pointing out that it is unlikely to raise or lower interest rates in the coming months amid signs of renewed economic health while at the same time inflation is still unusually low.
We noted in the previous technical analysis that the daily chart clearly shows a new bullish consolidation zone for the pair and that this performance foreshadows the pair's upcoming move towards further gains or bearish correction with the profit-taking operations.
Technically: As we had previously predicted that the stability of the USD / JPY below 110.00 will increase the bearish momentum of the pair and the next support levels may be 109.10, 108.60 and 107.80 respectively, which confirm the strength of the bearish trend. On the upside, the nearest resistance levels are currently at 110.10, 111.00 and 111.75, respectively. We still prefer to buy the pair from every bearish bounce.
On the economic data today: The economic agenda today will focus on US GDP, Unemployment Claimant and the Pending Houses Sales data. The pair will watch with caution and interest any renewed global geopolitical concerns and all about Trump's internal and external policies.
