Dollar continues slide as government shutdown continues

The US dollar fell to a 4-month low against the Japanese yen on the last trading day of the year.  Thin conditions persist as trading was closed for much of the euro area and Japan.  USD/JPY continue to remain heavy as no progress has been made with the US partial government shutdown, which is currently at 10 days.  President Trump reaffirmed his demands for a border wall, but it is not expected Democrats will budge on giving the President $5 billion for border security.  Democrats take over the House on Thursday, and there is no end in sight for the partial shutdown.

Price action on the USD/JPY daily chart shows that bearish move accelerated once price broke below consolidating triangle pattern in the middle of December.  Price has been trading through the 200-day SMA over the past week and appears to have settled on moving lower.  Tentative support is coming from the psychological 110 handle, but if that area breaks, we could see weakness target 108.50.  Deeper support could target 106.70.  To the upside, 111.00 remains key resistance.

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Ed Moya

Ed Moya

Senior Market Analyst at OANDA
With more than 20 years’ trading experience, Ed Moya is a market analyst with OANDA, producing up-to-the-minute fundamental analysis of geo-political events and monetary policies in the US, Europe, the Middle East and North Africa. Over the course of his career, he has worked with some of the world’s leading forex brokerages and research departments including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including BNN, CNBC, Fox Business, and Bloomberg. He is often quoted in leading print and online publications such as the Wall Street Journal and the Washington Post. He holds a BA in Economics from Rutgers University. Follow Ed on Twitter @edjmoya ‏
Ed Moya