- USD/JPY is flat in a quiet Asian session as traders await Trump’s second State of the Union speech.
- USD/JPY is currently trading at 109.94, tucked in below the 110 handle which bulls have been unable to commit upon, so far.
USD/JPY made a high of 110.03 overnight and 110.16 the prior day. US yields were a drag overnight as markets got prepared for Trump’s second State of the Union speech.
The benchmark yield on the US 10-yr note fell modestly, back to 2.70%, while 2yr yields ended slightly lower, around 2.52%. As analysts at Westpac pointed out, “Futures markets continued to price little chance of any further Fed rate hikes in this cycle, with a 10% chance of a hike in December and a 10% chance of a cut.”
- Wall Street closed with benchmarks at highest levels in several weeks
President Trump’s second State of the Union speech begins today 1pm Syd and analysts at Westpac explained what to expect:
“There is usually little for markets in any SOTU, with much of the content either boasting of past achievements or listing policy proposals that never become reality. On the latter, we may well hear another call for much-needed infrastructure spending, which President Obama also urged during SOTU addresses. Perhaps most relevant for markets is whether Trump has a plan for funding the border wall that doesn’t involve declaring a national emergency (media reports say he will not take that step). Government funding expires 15 February.”
USD/JPY levels
Valeria Bednarik, Chief Analyst at FXStreet explained that the pair is consolidating above its 100 and 200 SMA in the 4 hours chart:
“Technical indicators in the mentioned chart have continued easing from overbought levels reached earlier in the week, limiting the upward scope but still far from suggesting a bearish move ahead. Anyway and at this point, the pair would need to surpass 110.16, the yearly high set this week, to have chances to extend its gains during the following sessions.”
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