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  • USD/JPY holds onto recovery gains on US President Donald Trump’s weekend comments.
  • Upbeat data from the US helped recover the market’s risk tone on Friday.
  • US Durable Goods Orders will direct near-term moves.

USD/JPY takes the bids to 109.50 at the start of the week’s Asian session on Monday. In doing so, the pair reacts to the US President Trump’s trade-positive comments that rolled out on Saturday. The cross benefited from the market’s risk-on sentiment as well as upbeat US data on Friday.

On Saturday, the US President Donald Trump crossed wires, via Reuters, while saying, “We’ve just achieved a breakthrough on the trade deal and we will be signing it very shortly.” The same motivates the risk-takers to begin the holiday-shortened week on a positive side.

Friday’s solid US GDP smacked down the talks of recession. Adding to the greenback’s strength were upbeat results from other key data, including Personal Consumption Expenditure and the Michigan Consumer Sentiment Index.

While welcoming the US data, the market’s risk sentiment improved and the US equities had another record closing by the end of the week. Also portraying the risk-on was the US 10-year treasury yields that were on the positive side to 1.92% at the close.

Durable Goods Orders decorates the economic calendar”¦

Before heading to Christmas celebrations, market players will take note of November month US Durable Goods Orders, up for publishing on Monday, to confirm the latest positive data from the US. The headline Durable Goods Orders is expected to rise to 1.9% from downwardly revised 0.5% prior while the Nondefense Capital Goods Order ex Aircraft could spoil the mood if matching -0.3% forecast versus +1.1% previous readouts.

Additionally, the November month Chicago Fed National Activity Index, as well as New Home Sales, could also entertain traders before spreading the holiday mood. While the activity gauge is expected to recover to -0.09 versus -0.71 earlier, the housing data may soften to 0.728M against 0.733M prior.

Read: What you need to know for the open: Risk on to support AUD/JPY’s bullish grind

The holiday season is likely to hinder the market sentiment with a light economic calendar. Though, trade/Brexit headlines could offer intermediate direction and should be observed carefully while going forward.

Technical Analysis

Bulls need to clear 109.75/80 key resistance area in order to justify their strength in targeting 110.00 and May month top nearing 110.70. Failure to do so keeps the risk of witnessing monthly low, near 108.40, on the chart.