- Bulls need to get back above 10-DMA at 109.43 on a firm footing.
- For the week ahead, markets could be one to remember.
USD/JPY has been unable to recover lost ground at the start of this week with plenty of risk events ahead to keep the tone subdued until a green light turns on for one direction or the other. Currently, USD/JPY is trading at 09.43 having made a high of 109.54 and a low of 109.33.
The tone in the yen switched up last Thursday when stocks dropped (NASDAQ down 1%) and investors got set for the G7 on Friday, sending the pair down to as low as 109.48 before it stabilised around 109.70, (Kijun at 109.76). There was some positive geopolitical news that Abe’s and Trump’s meeting ended well where Trump vowed to improve the trading relationship with Japan and said that Abe promised Japan would invest more in the U.S.
Then, for Friday, markets remained risk-off right up until NY where the bulls recovered from 109.19 the low ( aTenkan prop/ after bears broke below the 10-D SMA at 109.38). US yields and stocks in NY rebounded despite what appeared to be a tense G7 getting underway on Friday and it looks as though it lived up to those expectations as analysts at ANZ explained here:
- Commentary, key themes and views: G7 and Brexit in focus – ANZ
The week ahead:
For the week ahead, markets could be one to remember should the ECB live up to expectations, and not least, the FOMC, BoJ and indeed Trump’s summit with North Korean leader Kim Jong-un – More on that here:
- In case you missed it: Big week ahead – ING
USD/JPY levels
Bulls need to get back above 10-DMA at 109.43 on a firm footing to limit supply. The Kijun, 100-hour MA and the hourly cloud base in the 109.80s guards ahead of the 200-D SMA. Above there, risk towards May’s 111.39 peaks and 111.50 as an option barrier could be a tough nut to crack, (a congested area where the 161.8% of May low & 76.4% of May drop is located). On the wide, the 112.30’s, (Fibos at 112.22/33) remain key upside target. On the other hand, a break below the Tenkan prop at 109.19, bears can look to the 55-DMA & daily cloud top around 108.60. 108.05, (100-D SMA), guards a run towards the mid-107.00s with the 2018 low at 104.56 in focus on the downside.
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