The USD is on the ropes versus the majors as Treasury Secretary Mnuchin and FED Chair Powell testify on the COVID-19 response. Thus far, there haven’t been any blockbuster revelations from Mnuchin. Below are a few highlights from his prepared comments:

• “While the unemployment rate is still historically high, we are seeing additional signs that conditions will improve significantly in the third and fourth quarters of this year.”
• “The Blue Chip Report is forecasting that our GDP will grow by 17% annualized in the third quarter, and by 9% in the fourth quarter.”
• “The U.S. Chamber of Commerce reported this month that 79% of small businesses are at least partially open.”
• “We are in a strong position to recover because the Trump Administration worked with Congress on a bipartisan basis to pass legislation and provide liquidity in record time.”

All in all, Mnuchin has been fairly optimistic about the pending COVID-19 recovery. The USD isn’t responding, as values are down today against most of the majors. Let’s dig into the USD/JPY weekly chart and check out the Greenback’s lone bright spot.

USD/JPY Approaches Weekly Resistance

Although we are in a holiday-shortened trading week, there are several events worth monitoring. COVID-19 hearings and tomorrow’s FOMC Minutes from June highlight the action. Currently, the Greenback is laboring against all of the majors except for the yen. Subsequently, rates are within view of a key topside resistance level.

Here are two levels worth watching for the remainder of the forex trading week:

• Resistance(1): Bollinger MP, 108.68
• Support(1): Daily SMA, 107.54

Bottom Line: In the event we see the USD/JPY extend weekly gains, a sell from the Bollinger MP will come into play. Until Friday’s forex close, I’ll have sell orders in the queue from 108.64. With an initial stop loss at 108.89, this trade produces 25 pips on a standard 1:1 risk vs reward ratio.