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  • USD/JPY: making fresh highs at the start of the week, reclaiming the 111 handle.  
  • USD/JPY: eyes will turn to FOMC minutes for the week ahead.

USD/JPY has been up to test space on the 111 handle having posted a high of 111.05 so far in the Tokyo open, extending the risk-on opening bid this week on following the trade-war headlines.

At the start of the Asian session, USD/JPY opened with a bullish gap on headlines that US Treasury Secretary, Mnuchin, had announced in a television interview that the US is putting the trade war with China on hold. “Right now, we have agreed to put the tariffs on hold while we try to execute the framework,” Mnuchin said in the television interview on Saturday.  

Eyes on 111.50  

So, the threatened sweeping tariffs on Chinese goods would not be imposed while the negotiations on a bilateral trade deal continue. USD/JPY slipped from 111.00 to lows around 110.60 on Friday while US Treasury yields fell amid jittery early NY trade and a lack of clarification around NAFTA and talks between China and the US. The risk-on sentiment at the start of this week is making back lost ground for the pair with eyes towards higher barrier levels around 111.50. For the week ahead, the FOMC minutes will be a key highlight.  

The week ahead data preview: eyes on FOMC minutes – Nomura

USD/JPY levels

USDJPY: The short-term momentum indicators look rather heavy

Valeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart, technical indicators retreated from overbought readings but stabilized well above their mid-lines: “the pair keeps developing above bullish 100 and 200 SMA, indicating that any decline will likely remain corrective as long as the pair remains above the 109.60 level.” Meanwhile, a close above the level over consecutive days is needed to put eyes back on the 112.30’s, (Fibos at 112.22/33) 111.50 needs to be broken first as being another potential option barrier.