USD/JPY Analysis: holding on to gains amid risk-on
|USD/JPY Current Price: 108.37
- Trade war optimistic headlines prompted speculative interest away from safe-havens.
- The US and Japan celebrate local holidays this Monday, no data scheduled for release.
- USD/JPY technically bullish, heading toward August high at 109.31.
The USD/JPY pair jumped to 108.62, its highest since late July, as news that the US and China are progressing toward a trade deal prompted speculative interest away from safe-haven assets. Wall Street closed with solid gains, while US Treasury yields surged to their highest for this October, with the yield on the benchmark 10-year Treasury note closing the week at 1.73%. The trade war between the two countries has been behind the slowing global economic growth and fears of a US recession, and market players believe that an agreement could at least put a halt to economic contraction. Japan and the US celebrate a local holiday this Monday, which will keep both macroeconomic calendars empty this Monday.
USD/JPY short-term technical outlook
The USD/JPY pair is bullish, according to the daily chart, as the pair has settled above its 20 and 100 DMA, both converging with a bearish slope around 107.60, providing a strong dynamic support in the case risk sentiment turns sour. The 200 DMA in the mentioned chart lacks directional strength above the current level, leaving room for additional gains, while technical indicators maintain their slopes upward within positive ground, also in-line with another leg higher. In the shorter term, and according to the 4 hours chart, the pair retains its bullish stance, as the 20 SMA has crossed above the larger one, all of them below the current level, as technical indicators consolidate within overbought levels.
Support levels: 108.00 107.60 107.25
Resistance levels: 108.65 109.00 109.35
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