Prospects for the USD/JPY for early July
The USD/JPY pair is one of the most volatile in recent months in conditions of constant risks and fears. This is not strange, since this currency pair is a kind of indicator of market confidence in the US dollar. Because the Japanese yen is the safe haven currency, which is resorted to in the face of risk. The US dollar in this pair acts as a more risky and profitable asset. Its growth, as a rule, indicates an increase in optimism, a growth in the US economy or a decrease in risks around the policies of the Trump administration.
In recent weeks and months, the decline in the USD/JPY pair has been caused by the growing trade opposition, the risks of a slowdown in the US economy and as a result the US Federal Reserve rates cut.
This currency pair is more dependent on overall risks. Therefore, the general factor and geopolitical risks will remain the main factor influencing the USD/JPY pair. Especially while waiting for the results of the G20 meeting that will be held on June 28-29, 2019, but more about it later.
Given the current technical picture and prospects that influence the market from fundamental factors, it is possible to make a forecast for the movement of the USD/JPY pair at early July.
H4 timeframe
On the H4 timeframe, the USD/JPY pair continues to trade in a downtrend, which can be traced from the beginning of May. The decline of this pair is limited by its oversold and is located in the lower half of the trading channel. This indicates the formation of a correction phase.
In this case, the possibility of correction to the resistance levels of 107.60 and 108.00 is not excluded, from which resumption of reduction is expected. Support is located on the marks: 106.30 and 106.00.
D1 timeframe
On the daily chart, the downward trend of this pair is limited by the Fibonacci retracement levels from the January low to the April 2019 high. The levels are 78% (106.30) and 100% (104.70).
W1 timeframe
On the weekly chart of the pair USD/JPY, the side triangle continues to form from June 2015. This indicates significant support for this pair at 106.30-00. Also, judging by the existing rate of decline, the test of significant support 106.00 may fall on the G20 summit and at the beginning of July 2019. In the longer term, this may indicate the formation of a rebound.
The further dynamics of the USD/JPY pair will depend largely on the results of the negotiations between the leaders of China and the United States at the G20 summit. In the conditions of further aggravation of the trade war, the possibility of a more significant weakening of the dollar against the Japanese yen is not excluded.
Anton Hanzenko