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James Hyerczyk
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USD/JPY

The Dollar/Yen stumbled on Monday as the greenback continued to lose its appeal as a safe-haven currency. The U.S. Dollar was pressured after investors were relieved that U.S. President Trump made no move to impose new tariffs on China during a news conference on Friday where he outlined his response to Beijing’s tightening grip over Hong Kong.

On Monday, the USD/JPY settled at 107.582, down 0.211 or -0.20%.

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ING analysts said the door to a weaker dollar had been opened now that new U.S. measures imposed over Hong Kong had proved less serious. Our work suggests a rangebound Dollar/Yen over the short-to-mid-term. We feel the Forex pair is not likely to make a major move until there is a major change in U.S. Treasury Bond yields or Japanese Government Bond Yields.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 108.088 will signal a resumption of the uptrend. The main trend will change to down on a move through 105.987.

The minor trend is also up, but a trade through Friday’s closing price reversal bottom could shift momentum to the downside.

The main range is 112.226 to 101.185. The USD/JPY is currently trading inside its retracement zone at 106.706 to 108.008. This zone is controlling the longer-term direction of the currency pair.

The short-term range is 105.987 to 108.088. Its 50% level at 107.038 is another support level.

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Daily Swing Chart Technical Forecast

Like I said before, the USD/JPY is not likely to make a major move until something happens to interest rates. Traders don’t seem to be paying too much attention to the carry trader at this time.

On the upside, taking out 108.088 could trigger an acceleration into 108.851 over the near-term.

On the downside, the key support cluster comes in at 107.084 to 107.038.

For a look at all of today’s economic events, check out our economic calendar.

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