July 23, 2018, 14:20: With Trump rally and expectations of Bank of Japan policy change, the yen strengthens [From Mr. Rikio Shima's newsletter]

Last Friday, the dollar/yen, which had been on an upward trend, was dashed by remarks from U.S. President Trump and fell sharply below the key 111.50 yen support. What is the outlook for USD/JPY this week? Please refer to today's issue of the investment newsletter "Shima Rikio's Real-Time Trading" provided by GogoJungle.

In the short term, it seemed that the trend line from around 125 yen had broken upward, and the price had clearly broken out from a large symmetrical triangle, but it failed to sustain. The year's high of 113.50 yen, and since 2017, prices have repeatedly faced resistance from the upper 113s to 115. Some see 115 yen and above as an unwelcome political barrier for the United States. From the high of 113.17 yen to today’s low of 110.75 yen, a drop of 2 yen and 42 sen has been sizable, so in the short term it could be considered as a top forming.
In the near term, it remains to be seen whether the support line from the year's low of 104.63 yen will hold, currently around 110.75 yen. Next, before rising, it may find support around 110.25–110.40 yen several times, then the psychological 110 yen level, and around 109.91 yen near the 38.2% retracement (104.63–113.17 yen).
The key points going forward are President Trump’s future statements and this month’s Bank of Japan meeting. Once the BOJ meeting happens, it may become a “topic of the market” for traders, so there could remain downside pressure on the yen until the meeting. However, after the BOJ meeting, Governor Kuroda might explain the market well, or the “fine-tuning” could be postponed.
Fundamentally, I think the low-110s are sufficient, but if Mr. Trump remains persistent, there might be a bit more room to fall.

From “Shima Rikio's Real-Time Trading” (Rikio Shima) quoted.

Today’s USD/JPY, during Tokyo time, shows little movement with no clear direction. (Editorial department)

USD/JPY, 1-hour chart

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