USD/JPY Analysis: In limbo ahead of Trump’s speech

ANALYSIS | 01/11/2017 10:20:15 GMT

"The dollar is set to resume the Trump rally if he provides specifics of stimulus measures, notably those related to tax cuts, which appear achievable. On the other hand, the market is also focused on potential risk factors, like Trump taking a tough stance against China. That could prompt the dollar to fall against the yen."

– IG Securities (based on Reuters)

Pair's Outlook
Even though the USD/JPY currency pair edged lower on Tuesday, the losses were not as harsh as was first anticipated. Wednesday, however, brings a lot of uncertainty, as the US President-Elect is scheduled to speak today. His speech could have a significant impact on the US Dollar's performance. We expect the Buck to strengthen and climb over the monthly PP, which rests at 116.20. Technical indicators also suggest the Greenback is to edge higher today. The overall ceiling is expected to be the 117.00 mark, where the 20-day SMA coincides with the weekly PP, making that area a rather strong resistance.
Traders' sentiment
There are now 53% of traders with a positive outlook towards the US Dollar, compared to 52% on Tuesday. At the same time, the number of orders to acquire the Buck inched up from 53 to 55%.

Interested in USDJPY technicals? Check out the key levels

1. R3 117.46
2. R2 116.91
3. R1 116.27
PP 115.72
1. S1 115.09
2. S2 114.54
3. S3 113.90

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