USD/JPY: Bulls cant get off the floor, trapped in a sideways chop deep in the 108 handle
- USD/JPY has been drifting sideways, basing between 108.00/40 for the most part in a chop following a drop in the greenback.
- Currently, USD/JPY is trading at 108.17, and remains heavy in Tokyo.
The pair remains heavy today following an overnight session of Fed speak and FOMC minutes that continue to represent the Fed's caution of rate rises. Despite that, US 10-year yields climbed to a daily high of 2.75%, its highest for this month on the back of risk appetite sending stocks higher following optimism over Sino/US trade relations.
- Wall Street closes in the green again and S&P 500 enters longest winning streak since September 14th
"Today’s headlines suggest that progress is being made on areas including energy and agriculture but further apart of ‘harder issues”. These may include matters such as intellectual property rights and wider support for strategic industries," analysts at Rabobank explained which has lifted the spirits of investors and is bringing back the prospects of the reflation trade when factoring the sentiment surrounding the Fed. The China Commerce Ministry has also come out today and said the China and the US agree to continue close communication on trade following deep, detailed communication with the US.
China Commerce Ministry: US-China trade talks were extensive
Meanwhile, BOJ's Kuroda, in a speech to a branch manager meeting has said that the BoJ will maintain policy as long as needed until CPI stable >2%.
- Support levels: 108.00 107.60 107.25
- Resistance levels: 108.50 108.95 109.20
Valeria Bednarik, Chief Analyst at FXStreet explained that the technical indicators entered negative territory, maintaining strong downward slopes in the 4hr chart:
"In the same chart, the 100 SMA accelerated its decline well above the current level, widening the distance with the 200 SMA which also presents a downward slope, both indicating that the pair could soon resume its bearish trend and attempt to retest the lows from the flash crash near 105.00."