USD/JPY: correcting on a better market mood
|USD/JPY Current price: 109.62
- Japanese trade surplus more than doubled the market's expectations in March.
- Trump's encouraging tweet about the trade deal weighed on safe-haven assets.
Market's mood improved a bit leading to some USD/JPY gains, following yet another tweet from US President Trump, stating that he "feels" the US-China trade talks will be successful. However, he keeps flooding the social media with comments on different subjects and could unleash risk aversion any time, as it did last week. Guess Wall Street's negative reaction to trade tensions is the reason behind his positive tweet that will probably help US indexes to bounce today. Asian shares were sharply down, but European ones are firmly up. Treasury yields also recovered with Trump's headlines, with the yield on the benchmark US 10-year note now at 2.41%. The USD/JPY pair trades at around 109.60, recovering from the 109.01 low posted yesterday.
Japan released its March Trade Balance, which printed a surplus of ¥700.1B, more than doubling the market's expectations, although the April Eco Watchers Survey on the current situation improved by less-than-anticipated, printing 45.3 vs. the expected 46.7 and the previous 44.8. The survey on the outlook was also softer-than-expected, coming in at 48.4. The US calendar will be quite light today, with minor updates on Export and Import prices inflation.
The pair corrected Monday's slump and trades around the weekly opening, with the upside potential seem quite limited, as, in the 4 hours chart, as the pair is currently struggling with a bearish 20 SMA, unable to advance beyond it. The 100 SMA extends its decline below the 200 SMA, both far above the current level. Technical indicators have corrected oversold conditions but were unable to re-enter positive ground, now heading nowhere right below their midlines. The corrective movement could continue up to the 110.00/10 price zone, although gains beyond this last seem unlikely at the time being.
Support levels: 109.45 109.10 108.80
Resistance levels: 109.90 110.10 110.50
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