USD gaining on uncertainty
The American dollar has been rising since the end of January, as some investors are trying to hedge themselves against possible market downturn. The dollar counts as safe haven in times of economic uncertainty. Also, higher Treasury yields indicate future inflation and rate hikes, which increases demand for the greenback. The USDJPY made a series of higher highs and lower lows on the daily chart, confirming a mid-term uptrend.
During yesterday´s session it penetrated the resistance level, which was formed in July 2020 and closed the day within that 106.90 – 107.40 range (A). If the bulls manage to lift the course above this resistance, it could test the previous highs at 108.20 and higher at 109.80 (yellow lines). If the course turned back from this level, the 50 moving average could provide some support as it did before when the higher lows were created. Falling below the 50 EMA could send the pair to the 103.60 – 103.90 support zone (B).