- USD/JPY’s hourly chart shows a symmetrical triangle breakout.
- Risk appetite recovers as President Trump confirms that the China trade deal is intact.
USD/JPY made a quick recovery from session lows near 106.75 to print session highs above 107.20 after President Trump tweeted that the China trade deal is not over.
The bid tone around the Japanese yen strengthened, pushing USD/JPY lower by 25 pips about an hour ago after White House adviser Peter Navarro told Fox News that President Trump has decided to terminate the China trade deal in light of growing evidence that the coronavirus originated in Wuhan laboratory.
The sharp recovery from 106.75 to 107.20 has confirmed a symmetrical triangle breakout on the hourly chart. The pattern indicates that the sell-off from the June 5 high of 109.85 has ended and the bulls have regained control.
The next major resistance is seen at 107.64 (June 15 high), which, if breached, would confirm a double bottom breakout on the hourly chart and could yield a rally to 108.50 (target as per the measured move method).
The bias would turn bearish if the pair finds acceptance under 106.74 (the low of the previous hourly candle).