- The pair spent the day consolidating between Fibonacci levels.
- The Kijun level of 109.76 is sticky once again.
- Traders await G7 and potential trade war angst to temper bullish attempts.
USD/JPY is mixed in the open, directionless and remains around the 109.60/70’s in line with the previous session’s consolidation at the Kijun level of 109.76. Traders await the G7 this weekend, starting today in Quebec where risk-off tones sounded off overnight due to the expectations of trade wars heating up.
USD/JPY dropped back from the recent highs through the 200-D SMA at 110.18, 110.26 was the highs) as risk sentiment rolled over. USD/JPY was taken down to as low as 109.48 before it stabilised around the aforementioned kijun level on news that Abe’s and Trump’s meeting ended well. Trump vowed to improve the trading relationship with Japan and said that Abe promised Japan would invest more in the U.S. (However, there was no talk about metals tariffs or removing auto tariffs threat though).
US yields flop
As far as US treasury yields went, the ten years climbed higher from 2.97% to 2.99% in the London morning, but then plunged to 2.88% in NY. The Fed funds futures continued to predict a rate hike next week and another by year end. The DXY ranged between 93.2130-93.5940.
USD/JPY levels
Valeria Bednarik, chief analyst at FXStreet explained that technically, the pair has spent the day consolidating between Fibonacci levels, right below the 61.8% retracement of the latest daily slump at 110.15, but above the 50% retracement of the same chart at 109.75, this last finally broken in the US afternoon: “More relevant, the 4 hours chart shows that the pair has also broken below its 100 SMA while technical indicators entered negative territory with strong downward slopes, supporting additional declines toward 109.35, the next Fibonacci support.”
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