USDJPY Price Nudges Higher as US-China Trade Tensions Cool For Now
- US-China trade talks back in focus.
- Daily USDJPY chart giving little away.
USDJPY Pushes Higher on US-China Tariff Push Back
News out late Thursday that US Treasury Secretary Steve Mnuchin was considering easing tariffs on Chinese imports sent risk markets higher, dragging the risk-averse Japanese Yen lower. The reported move, not yet officially confirmed, would help ease the current trade impasse between the world’s two largest economies and underpin the US dollar against a range of risk-off currencies.
USDJPY has now fully erased the January 2 spike low – caused by Apple’s revenue warning adding to a bearish global backdrop –and is now roughly in the middle of October 2018 – January 2 range and is also around the 50% Fibonacci retracement level of the November 2017 – March 2018 sell-off. The pair have moved out of oversold territory and currently sit mid-market of the RSI indicator, albeit still pointing higher. For USDJPY to make a decisive break higher, the pair need to break and close above resistance at 110.88 (61.85 Fibonacci), then 111.310 (50-dma) and then 111.539 (200-dma). Support at 109.36 (June 25-26 double low) and then 108.49 (38.2% Fibonacci).
USDJPY Daily Price Chart (September 2017 – January 18, 2019)
IG Client Sentiment Datashows investors are currently 60.3% net-long, a bearish contrarian indicator. However recent daily and weekly positional shifts give us a mixed trading outlook.
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