For three consecutive trading sessions, the USD / JPY pair moved in a bullish correction from its 107.21 support level, which was the lowest level in a month, reaching resistance at 108.18 at the time of writing. As we had previously expected, the pair is trying to stay away from the psychological support level 108.00 to avoid further bearish pressure, and test stronger support levels. Overall, the US dollar remains under pressure from market expectations that the Federal Reserve will cut US interest rates next week, with expectations that the bank will cut interest rates by only a quarter of a point, with other expectations of a half-point cut. By the end of this week, US GDP figures will be released amid expectations of a slowdown after recent record numbers, as the trade dispute with China continues, slowing the world's second-largest economy to its lowest level in 26 years. The US economy is not too far from being affected by this conflict either.
The JPY is still in the winning position as investors flock to safe haven amid continued global trade and geopolitical tensions. US-China trade negotiations are showing no progress, and Trump may not like that much, and may force him to raise US tariffs on all imports from China.
Technically: The general trend of the USD / JPY pair is still towards the continuation of the decline, as long as it is stabilized below the 110.00 psychological resistance level, and therefore the nearest support levels for the pair are currently 107.20, 106.70 and 106.00 respectively, levels are supporting the continuation of the current trend strength. On the upside, the nearest resistance levels are currently at 108.30, 109.00 and 109.85, respectively. Technical indicators confirm that the price of the pair reached oversold areas and that it is ready for correction, but there are currently no incentives to do so.
On the economic data front today: The economic calendar today is free of any important and influential data from Japan or the United States of America. The pair will react to renewed global geopolitical concerns as the Japanese yen is one of the most important safe haven.