USD/JPY peeps above 110.00, bearish outside-day makes NY close pivotal

• USD/JPY prints session highs above 110.00 on rumors of US-China trade talks.
• The pair created a bearish outside-day candle yesterday.
• Bearish outside-day and potential key day reversal below 109.84.

The USD/JPY is on the rise, having printed a session high of 110.08 earlier today, possibly on rumors of US-China trade talks.

Bloomberg reported earlier today that some senior White House Officials are trying to restart talks with Beijing before the US tariffs on China come into effect on July 6. The rumor has likely lifted Asian stocks. At press time, big names like Shanghai Composite, Hang Seng, and Kospi are reporting moderate gains.

Further, data released today showed the core consumer price inflation in Japan stays well below 50 percent of Bank of Japan’s (BOJ) target of 2 percent, meaning the central bank’s ultra-easy monetary policy will likely be on hold for a long period of time.  

Consequently, USD/JPY recovered from the session low of 109.83 to 110.08 and may rally further if the stocks in Europe and US post gains.

Focus on today’s NY close

A close below 109.84 (previous day’s low) would add credence to Thursday’s bearish outside-day candle and confirm a bearish trend reversal. Meanwhile, a close above 110.76 (previous day’s high) would put the bulls back into the driver’s seat.

USD/JPY Technical Levels

Resistance: 110.22 (200-day moving average), 110.76 (previous day’s high), 110.90 (June 15 high).

Support: 109.84 (previous day’s low), 109.50 (ascending 50-day moving average), 108.82 (38.2% Fib R of 104.63-111.40).