USD/JPY Analysis: sour sentiment underpins the JPY
|USD/JPY Current price: 108.16
- US-China trade truce lacks details, Brexit deal still far away.
- USD/JPY correcting latest rally, critical support at 107.80.
Risk sentiment turned sour at the weekly opening, as, despite the US and China have come to a truce in their trade war, announcing that the first part of a deal has been achieved, there were not many details on it. Furthermore, Brexit headlines indicated that a deal in that front is still far away. The USD/JPY pair fell to 108.02, trading now in the 108.15 price zone. Japan and the US celebrate local holidays this Monday, with no data coming from these countries.
European equities trade in the red, reflecting the dismal market mood, although a scarce calendar and the lack of fresh news in the political front, limit majors’ ranges.
USD/JPY short-term technical outlook
The USD/JPY pair is correcting after last week’s rally, currently around the 23.6% retracement of its latest daily advance, measured between 106.47 and 108.62. In the 4 hours chart, the pair continues developing above all of its moving averages, with the 20 SMA heading north above the larger ones, these last, also gaining traction upwards. Technical indicators are retreating further from overbought levels, still well above their midlines, rather reflecting the ongoing slide than suggesting more to come. The 38.2% retracement of the same rally comes at 107.80, with chances of a steeper decline increasing once below this last.
Support levels: 107.80 107.55 107.30
Resistance levels: 108.45 108.80 109.15
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