USD/JPY technical analysis: Nears 200-bar SMA amid upbeat US-China trade headlines
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USD/JPY technical analysis: Nears 200-bar SMA amid upbeat US-China trade headlines

  • USD/JPY surges to the highest in a week, close to 200-bar SMA.
  • News that the US and Chinese trade diplomats will meet in October mainly triggered the risk-on.
  • 50% Fibonacci retracement could question the pair’s further upside.

With the Reuters report revealing details of the much-awaited US-China trade meeting, to be held in October, USD/JPY surges to a week’s high while taking the bids to 106.70 amid initial Asian session on Thursday.

Early on Thursday, Reuters spread a news report quoting statements from Chinese Commerce Department that China’s Vice Premier Liu He held a phone call with US Trade Representative Robert Lighthizer and the Treasury Secretary Steve Mnuchin while confirming a trade meeting between the two superpowers during early October. The sides also agreed to take actual actions to create good conditions for trade consultations, as per the news report.

With this, the pair nears the 200-bar simple moving average (SMA) level of 106.72, a break of which could escalate the rise towards 50% Fibonacci retracement level of August month declines, at 106.90. However, likely overbought conditions of 14-bar relative strength index (RSI) could limit the pair’s upside form then.

If buyers fail to respect 106.90 and dominate beyond that, 61.8% Fibonacci retracement level around 107.45/50 will flash on their radar.

Meanwhile, pair’s pullback can take rest close to 106.30, including 38.2% Fibonacci retracement, ahead of testing 100-bar SMA level of 106.18. Though, an upward sloping trend-line since August 25, at 106.00, will question sellers afterward.

USD/JPY 4-hour chart

Trend: bullish


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