- Wall Street looks to open in positive territory.
- 10-year US Treasury bond yield stays quiet following Monday’s selloff.
- US Dollar Index fluctuates in tight range below 98.
The USD/JPY pair rose above the 109 handle on Monday but failed to preserve its bullish momentum as the uncertainty surrounding the United States (US)-China trade dispute caused investors to move towards safe-havens such as the JPY. With the lack of significant fundamental drivers paving the way for technical price action, the pair was posting modest daily gains at 108.75 at the time of press.
US-China trade conflict remains in spotlight
Chinese news outlet Global Times on Tuesday reported that the US and China had a “long way to go” to come to terms on trade and end the conflict.
Additionally, commenting on the CNBC report that claimed China could wait for the outcome of the 2020 presidential election in the US before signing a trade deal, “China appears set on trying to ‘wait Trump out’, which was a meme we heard earlier in the trade war, rather than pinning its hopes on a “phase one” deal – of which we have been highly sceptical from the get-go,” said Rabobank analysts. “It also suggests no trade deal at all due to red lines of intellectual property, subsidies, and enforcement mechanisms.”
Nevertheless, the S&P 500 Futures is up 0.25% ahead of Wall Street’s opening bell and a decisive rebound in major stock indexes on Tuesday could help the pair edge higher toward the 109 handle.
On the other hand, the US Dollar Index is fluctuating in a tight range near the 97.80 mark on Tuesday, allowing the risk sentiment to affect the pair’s movements. The only data from the US on Tuesday showed that Building Permits and Housing Starts both rose sharply in October, 5% and 3.8% respectively, but did little to nothing to help the greenback gather strength against its peers.
Technical levels to watch for
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