- Trade tussles remain in the spotlight.
- Fed policymakers hold their previous view, except for the Chairman.
- Fewer data could shift market focus to qualitative catalysts.
With the escalating trade tensions and lack of positive comments from the US Fed policymakers, the USD/JPY pair declines to 108.15 at the time of Tokyo open on Wednesday.
The World Bank recently rang an alarm to trade watchers with its downgrade to global economic outlook while a harsh tweet from the US President concerning his stand on Mexico highlighted escalating trade war tensions.
The US Vice President Mike Pence is up for meeting Mexican lawmakers in absence of the President Trump at the White House to discuss trade. The latest tariffs on Mexico will be in effect from Monday.
In addition to its hard stand on Mexico, the US has also turned down General Motor’s request to avail tariff relief on its China-made Buick whereas the Commerce Department began its search to replace China/Russia as top-tier rare earth sellers.
The Fed policymakers continued repeating patience on monetary policy, except for the Chairman Jerome Powell, while conveying the strength of the US economy.
Global risk tone was on recovery ahead of the Japanese open with the US 10-year treasury yields extending the previous upside to 2.131% by then.
While lack of economic data indicates less active trading sessions, political plays surrounding the trade wars and scheduled speech from the US Federal Reserve Board of Governors Vice Chair Richard Clarida could keep entertaining momentum traders.
Technical Analysis
Unless clearing 108.50, the quote continues to favor sellers targeting the latest low of 107.85 and then the 107.50 mar including January 04 bottom.
On the contrary, an upside clearance of 108.50, comprising latest highs and January 31 low, can trigger the pair’s recovery towards mid-May bottom surrounding 109.00 ahead of pushing buyers towards 109.80 and 110.00 resistances.
Share
