- USD/JPY awaits fresh clues to stay positive beyond 100-day EMA.
- Trade optimism favors the bulls but doubts prevail.
- Japan’s market off today amid Culture day, US calendar is light, eyes on risk news for fresh impulse.
Although global risk headlines have been quite a few over the weekend, USD/JPY fails to extend its bounce off 100-day EMA amid the initial Asian session on Monday.
The pair recently benefited from the US-China trade positive news as the United States (US) President Donald Trump recently signaled phase one deal to be signed in this month near the US. Also adding to the risk-tone could be the US Trade Secretary Wilbur Ross’s comments over the weekend that said the US may not need to impose auto tariffs this month.
Even so, the US 10-year treasury yields recently dropped to multi-week lows as the US Federal Reserve (Fed), Bank Indonesia and Central Bank of Brazil recently announced third back to back cut in their benchmark rates.
With the markets in Japan off for today, coupled with a light economic calendar, investors will keep eyes on risk catalysts like the US-China trade headlines and political plays surrounding Brexit for fresh direction.
Given the mostly upbeat sentiment around trade deal between the world’s top two economies, coupled with receding political uncertainty surrounding Brexit, risk tone could keep recent recovery. However, any negative is likely to be taken seriously considering the market’s scepticism.
Technical Analysis
Prices need to close beyond the 200-day Exponential Moving Average (EMA) level of 108.73 in to challenge 109.28/32 region including highs marked in September and October, failure to do so can keep flashing risk of pair’s decline to 107.50. Though, a daily closing below 100-day EMA level of 108.00 becomes necessary for the same.
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