USDJPY:
The Japanese yen (JPY) traded with a slight positive bias against its U.S. counterpart for the second consecutive day on Monday amid a rebound in demand for the safe-haven currency, although the gains are not bullish. Despite signs of easing trade tensions between the US and China, US President Donald Trump’s rapidly shifting stance on trade policy has kept investors on edge. In addition, geopolitical risks are weighing on investor sentiment and providing some support to the yen. In addition, the moderate weakening of the US Dollar (USD) is pushing the USD/JPY pair towards 144.00 during the Asian session.
However, the Bank of Japan’s (BoJ) ‘restrained’ pause last Thursday may deter JPY bulls from aggressive bets. In fact, the BoJ lowered its economic growth and inflation forecasts for the current year, causing market participants to cut bets on an immediate interest rate hike. In addition, traders may refrain from aggressive bearish bets on the dollar and prefer to step aside ahead of the two-day FOMC meeting that begins on Tuesday. This could serve as a tailwind for the USD/JPY pair and limit any corrective decline from the multi-week high reached on Friday.
Trading recomendation: BUY 144.20, SL 144.00, TP 144.90
Origin: FreshForex
