- USD/JPY declined on Wednesday as U.S. dollar was weighed down on worries about the prospects for the Trump administration's economic agenda.
- The U.S. currency was reeling from the collapse of the Republicans' push to overhaul healthcare, raising questions over President Donald Trump's ability to pass promised tax cuts and infrastructure spending.
- However, investors remained wary of pushing the U.S. currency lower before meetings this week with the European Central Bank and the Bank of Japan, and market watchers will be looking to see if the recent strength of the euro and the yen influence their policy outlooks.
- The Bank of Japan began a two-day policy meeting that will end on Thursday. Analysts polled did not anticipate a shift in policy at the meeting.
- Currently, the currency pair is trading at 111.80 levels, it is set to decline further towards 111.50 and later 111.20 levels in the short term.
- To the upside, immediate resistance can be seen at 112.10, a break above this level would take the pair towards next resistance level at 112.48.
- To the downside immediate support can be seen at 111.34, a break below this level will open the gates towards next level at 111.00.
Resistance Levels
R1: 112.10 (50% Retracement level)
R2: 112.48 (June 27th high)
R3: 112.98 (61.8% Retracement level)
Support Levels
S1: 111.34 (38.2% Retracement level)
S2: 111.00 (Psychological levels)
S3: 110.36 (23.6% Retracement level)
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