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  • The US lawmakers support President Trump’s readiness to reinstate tariffs on China.
  • Few optimists still expect a successful deal as the dragon nation is to visit Washington.

With the US lawmakers showing strong support to the President Trump’s readiness to levy increased tariffs on Chinese goods, USD/JPY seesaws near 110.70 during the early Asian session on Tuesday.

The US President Donald Trump showed readiness to levy 25% tariffs on China’s $200 billion goods and fetch under $325 billion under the umbrella late on Sunday. The news dragged the Yen beneath 14-week old support on Monday.

The pair remained volatile at the start of the following day as the headline US lawmakers like Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin were on wires confirming the authenticity of Trump’s statements.

As per the Reuters report, the US-side negotiation leaders to China said that the dragon nation has off-late showed various signs that dimmed the prospects of a smooth discussion over the trade deal. Hence, they support the President’s threat to levy additional duties on Chinese goods should both the nations fail to agree over the trade deal by Friday.

Following the news report, risk-safety regained trade attention and the quote dropped to 110.55. However, as China is still to visit the US policymakers during Thursday and Friday for further trade talks, some optimists do expect a trade deal by then to avoid another tariff-war between the global giants.

The global risk barometer, yields on 10-year US government bonds, remained soft near 2.50% during early hours of Tuesday.

Moving on, Japan’s Nikkei manufacturing PMI for April will be up in few hours. The activity gauge is likely to remain unchanged in the contraction region with 49.5 level.  

On the US side, March month JOLTS job opening could entertain traders with 7.240 million figure versus 7.087 million prior.

Technical Analysis

A sustained break of 111.00 mark comprising near-term important trend-line resistance (previously support) could recall 111.30 and 200-day SMA level of 111.55 on the bulls’ radar.

It should also be noted that the quote’s sustained trading beneath 100-day simple moving average (SMA) level of 110.70 may continue to favor sellers expecting 110.30 and 109.70 support levels as their targets for short positions.