USDJPY yen
Trading on USDJPY has been limited in today’s quiet Asian trading. The currency pair is virtually unchanged from its opening price as it trades around 107.14. Technicals suggest that USDJPY could soon revisit its previous lows.
Today is a quiet day on the economic front without any major reports due for release from the US and Japan. In fact, today is a holiday in Japan as the nation observes Marine Day. This could mean one of two things. The first is that there may not be a lot of movement because currency flows are limited. Second, the lack of liquidity could make the market more volatile.
What could move USDJPY? Investors will likely take their cue from market sentiment. Rising coronavirus cases in the US and escalating tensions between China and the US seem to be dominating headlines as of late. Developments which could cause worry among investors could strengthen the yen and push USDJPY lower. On the other hand, improvements in the coronavirus situation and the political situation could push the currency pair higher.
On the 4-hour time frame, it can be seen that USDJPY is testing a critical resistance level around $107.20. This price coincides with the 100 SMA and 200 SMA. Additionally, it also aligns with the falling trendline when you connect the highs of July 1, July 20, and July 21. Reversal candlesticks around this price level could mean that we may soon see USDJPY fall to its recent lows at 106.70.
On the other hand, a strong bullish close above the high of July 22 at 107.28 could mean that USDJPY may soon trade to its July 20 highs at 107.53. If resistance at that price does not hold, the next ceiling could be at 107.78.
