23 July 2019, OctaFX – The Dollar started the week extending its Friday’s rally, after speculation of a softer approach by the Fed to rate cuts. In the first half of the day, the risk-off sentiment took over after tensions in the Middle East and the resignation of UK’s Foreign Minister, Sir Alan Duncan.
Although, the market’s sentiment improved in the second half of the trading session, as Wall Street surged, on news US officials are traveling to Beijing next week to resume trade talks.
In economic news, BOJ’s Governor Kuroda spoke in Washington, reiterating that the central bank “persistently continue with powerful monetary easing”, towards achieving the desired 2.0% inflation target. Today, the US Dollar will likely resume being favored over the anti-risk Yen as long as equities continue to march upwards.
USDJPY technical analysis
The US Dollar broke above the bearish trend line, the 50 and the 200-day moving averages, signaling a strong bullish reversal on this pair. The first challenge for the bulls will be 108.30, but giving this strong momentum, the buyers will likely break above this level, targeting the next level of resistance 108.50. The bears need to protect those two resistance levels, or else 109 will be exposed.
Support: 108.05 / 107.80
Resistance: 108.30 / 108.50
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