USDJPY Buy or Sell?

USDJPY Buy or Sell?

USDJPY Buy or Sell?

Despite a rise in U.S. yields, USD/JPY traded sharply lower today on the back of the largest one day drop in stocks since the election. With that in mind, the Dow fell only 122 points which is only 0.6%. This morning’s U.S. economic reports were mixed with personal spending beating expectations but incomes rising less than expected. We believe this decline in the dollar will temporary as the Federal Reserve is likely to reassure the market that 3 rate hikes are coming this year. Economic data has been relatively good with inflation rising. The market may be concerned about Trump’s desire to incorporate currency values into bilateral trade talks but we doubt that other countries who rely on a weak currency for growth will be willing to concede on these terms.

Technically the current trend of USDJPY is negative but there is quite a bit of support below current levels. 112.50 would be a great level to buy USDJPY with a stop below 112 because if the breaches that level there is no major support until 110. On the upside, 115 is resistance.

Chart Of The Day

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