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  • S&P 500 futures are reporting a 0.5 percent gain. China’s Shanghai Composite has erased early losses and is now reporting gains.
  • The risk reset likely put a bid under the USD/JPY, however, the upside in the pair is being capped by the 21-day SMA.

Currently, the USD/JPY pair is trading at 112.62, representing a 0.23 percent gain on the day.

The gains are likely associated with the uptick in the S&P 500 futures and Asian equities. Notably, Shanghai Composite, which dropped 0.20 percent in early trade, is now up 0.70 percent on the day.

Further, reports are doing the rounds that President Trump, during an interview with Fox News, said that he is expecting a “great” trade deal with China.  As a result, the risk assets may remain well bid in Europe and the US.

Technically speaking, the pair’s recovery from Friday’s low of 111.38 to 112.62 has trapped the bears on the wrong side of the market. However, a bullish reversal would be confirmed above 112.84 (Oct. 23 high).

Also, the 21-day SMA lined up at 112.70 is proving tough to crack as of writing, but could be breached if the European equities post stellar gains.

Technical Levels

USD/JPY

Overview:
       Last Price:  112.66
       Daily change:  29  pips
       Daily change:  0.258%
       Daily Open:  112.37
Trends:
       Daily SMA20:  112.72
       Daily SMA50:  112.17
       Daily SMA100:  111.6
       Daily SMA200:  109.87
Levels:
       Daily High:  112.58
       Daily Low:  111.78
       Weekly High:  112.9
       Weekly Low:  111.38
       Monthly High:  113.71
       Monthly Low:  110.38
       Daily Fibonacci 38.2%:  112.27
       Daily Fibonacci 61.8%:  112.08
       Daily Pivot Point S1:  111.9
       Daily Pivot Point S2:  111.44
       Daily Pivot Point S3:  111.1
       Daily Pivot Point R1:  112.71
       Daily Pivot Point R2:  113.05
       Daily Pivot Point R3:  113.51