USD/JPY Technical Analysis: Upward correction for the third consecutive day
For three straight trading sessions, the USD / JPY pair is in upward correction pushing it to the resistance level at 108.89 at the time of writing, which is the highest in a month. As we mentioned before, we confirm now that the confirmation of the strength of the pair's upward correction will not be without moving around and the above the psychological resistance at 110.00. The Japanese yen remains the leader of safe haven assets for investors to hedge from continued global trade and political tensions, led by the US-led global trade war with China and the situation in the Gulf region. For the US economy, there was a new boost in US job numbers in June, which supported recent US dollar gains, as with those results, markets ruled out a chance to cut the US interest rate at the Federal Reserve meeting this month.
Investors will return to buying the Japanese yen again if Trump is frustrated by the trade negotiations with China and may impose tariffs on all imports from China. On the other hand, if the two sides reach a long-term trade agreement, the Japanese yen may lose a lot, as that will increase risk appetite. In general, investors do not trust Trump and his policy. They often negotiate and then imposed more tariffs between the two parties.
Technically: As we had previously predicted, the bearish momentum of the USD / JPY will increase with the stability below the 110.00 level, and the pair has reached the levels we expected in the previous technical analysis, and is now closer to the at 108.00, 107.45 and 106.60 respectively, that confirms the strength of the downward trend. On the upside, the nearest resistance levels are 108.85, 109.55 and 110.20 respectively. We still prefer to buy the pair from every bearish bounce.
In today's economic data, the economic calendar today will focus on Powell’s comments and the US job numbers. From tomorrow, the markets will have a more important day with Powell’s testimony and the announcement of US inflation numbers. The pair will monitor with caution and interest the renewed global geopolitical concerns, and all about Trump's internal and external policy.
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