For the second day in a row since the beginning of this week, the USD/JPY pair is moving in a narrow range between 109.27 and 109.62, which is stable around the time of writing . Yesterday, the pair did not find opportunities to launch amid a complete absence of important economic data and a US holiday. Today, the pair will be watching the announcement of the consumer price index from the Japanese central bank and later the announcement of US consumer confidence. In general, stability below 110.00 psychological resistance negatively affects the expectations of rising and stability above will support new buying for the pair.
The Yen gained against other major currencies recently amid investor fears and risk aversion following recent global trade tensions. As is well known, the Japanese Yen is one of the most important safe haven assets. The USD/JPY fell 1.7% in May. Trade tensions between the United States and China have increased and no trade deal has been reached despite US officials' assurances that significant progress has been made. China responded to US sanctions against Huawei and suspended trade talks with the United States. Investors remain concerned about the US-China conflict and the weakening of the global economy, which could increase the Japanese Yen's gains.
US stocks closed lower last week, and on the economic data, US durable goods orders for April were lower than expected. Durable goods orders declined by 2.1%, slightly below -2.0%. This was the biggest drop since January 2018. Core durable goods orders slowed to 0.0%, down from 0.4% the previous month. The US economy performed well and the markets are looking forward to this week’s release of first quarter GDP figures, which are expected to achieve strong gains of 3.1%. The preliminary GDP reading showed a 3.2% rise, stronger than the 2.2% forecast. The US dollar will be strongly affected in response to the results of this important report.
The most important support levels for the USD/JPY today are: 109.20, 108.65 and 107.80, respectively.
The most important resistance levels for the USD/JPY today are: 110.20, 111.00 and 111.85, respectively.