- The Gopher managed to break the monthly support and entered the negative territory
- The Greenback is under pressure amid the US-China high tension
- The US ISM Services PMI came out higher than expected on Tuesday
Daily Time Frame:
The Greenback was facing a massive sell-off from investors, where they pushed the USD/JPY more than 4% since the beginning of April.
A clear downtrend is shown on the chart below with a correction before the USD/JPY makes its big move downward.
4 Hr Time Frame:
Zooming in to see what is happening on the 4hr chart, the price is consolidating under the monthly resistance (support previously).
A quick look on the MACD, it shows us that the price is ranging with no move expected soon.
If the USD/JPY succeeds to break the white trendline, the pair will enter the bearish territory. While, if it manages to move upward again and close above the resistance and break the 100 SMA (Simple Moving Average), the price will be led by the bulls.
Since the Greenback is one of the currencies of the USD/JPY pair, it might worth having a look at the US data and news.
On Tuesday, the US PMI was released. It was higher than expected, which is good for the currency. But the investors did not react positively, and the Greenback lost value after this news was released.
Trade wars between US-China are fueling again, which gives an advantage to the Japanese Yen over the US Dollar, especially as the Gopher is considered a safe-haven currency.
With the high tension between the U.S. and China, and reopening of the US economy, will the Greenback be able to appreciate over the Japanese Yen?