The American currency continues to decline along the entire broad market. Losses of the dollar against the yen this week alone exceed 1%. During the trading session on Wednesday, the USDJPY pair is testing support at 105.00, maintaining the potential for a move lower.
Today, traders are focusing on the results of the two-day meeting of the US Federal Reserve System. Recall that analysts do not expect any significant changes in the course of the monetary policy of the American regulator, however, the comments of officials are more important today than ever. There is a possibility that the representatives of the FRS will speak out regarding the adjustment of the target levels for inflation, given the alarming situation in the economy, as well as touch upon the prospects of the support program, which is now being actively discussed in the Senate.
The dollar's decline remains due to the difficulty of containing the coronavirus in the United States, dampening hopes for a quick economic recovery and leaving investors to doubt the relative economic strength of the United States. The U.S. Consumer Confidence Index declined more than expected in July after a two-month recovery - a sign that rising COVID-19 cases continue to curb consumption. Four U.S. states in the South and West reported daytime records for new coronavirus deaths on Tuesday. Against this background, the chances are still quite high that the Fed will at least hint at its readiness for additional stimulus. In addition, the lack of certainty about the next stimulus package in the United States remains a significant risk for the dollar, as Democrats and Republicans do not abandon their principled positions. Some Senate Republicans have opposed their own party's proposal for a $ 1 trillion package of measures, while Democrats want significantly more generous support, including a full extension of the $ 600 per week unemployment bonus. Let us remind you that the previous fiscal support ends at the end of July. The problem, therefore, is that more stimulus is needed by the end of the month to keep the economy on the “fiscal edge of the cliff”. With that said, the dollar sales may continue. that the previous fiscal support ends at the end of July. The problem, therefore, is that more stimulus is needed by the end of the month to keep the economy on the “fiscal edge of the cliff”. With that said, the dollar sales may continue. that the previous fiscal support ends at the end of July. The problem, therefore, is that more stimulus is needed by the end of the month to keep the economy on the “fiscal edge of the cliff”. With that said, the dollar sales may continue.
USDJPY SellLimit 105.10 TP 103.00 SL 105.70
Analytical reviews and comments to them reflect the subjective opinion of the authors and are not a recommendation for trading. Author Artem Deev is a trader analyst at AMarkets . The social network of traders is not responsible for possible losses in case of using the review materials
