Thursday, 8 June 2017
What’s next? – USDJPY 08.06.17
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what’s next
USDJPY
The US dollar extended its recovery in European hours on Thursday, moving 0.16 percent higher against a trade-weighted basket of six major rivals, to trade at 96.87 by the time of this writing. The American currency has been under lots of pressure lately due to increased political tensions in the Middle East, the Korean peninsula and most importantly, Washington.
Today is a key date for US politics as former FBI director James Comey is set to testify before the Senate Intelligence Committee about his investigation into potential ties between Trump’s presidential campaign and the Russian government. Explanations over an alleged request from President Trump to halt an investigation into his then-National Security Adviser Michael Flynn will also be expected in this audience. Strong media coverage is anticipated for this event.
The USDJPY was trading around the 110.10 mark as of 11:15 GMT, adding 0.26 percent from its previous close as the greenback continues to scale back in the chart. The Japanese yen has benefited from strong demand in the last 72 hours, with traders moving into safe-haven assets ahead of Comey’s testimony, but also looking ahead of the ECB meeting and UK elections.
The pair finds strong support on the 109 level and a sustained trading above the 110 could be seen as very bullish. Nevertheless, a downward correct wouldn’t be a surprise depending on the outcome of today’s fully loaded economic and political agenda.
The dollar/yen is a pair with a strong relation to the risk attitude. Focusing now on Comey’s audience, if the Trump administration is compromised, the dollar might plunge or rally in case concerns ease over his ability to negotiate with Congress different economic promises.
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