USD/JPY: firmer above 110.00, bullish beyond 110.40
|USD/JPY Current price: 110.17
- The US rolled back some of the sanctions imposed on Huawei.
- Trade tensions persist, with the OECD urging both parts to end the trade war.
The American currency strengthens against most major rivals this Tuesday, with the USD/JPY pair holding afloat above the 110.00 level. The greenback got an extra boost from US Fed Chief Powell, who cooled down prospects of a rate cut in the world's largest economy. Speaking in Florida, Powell said it would be premature to judge the effects of the trade war, adding that he doesn’t believe it could affect the central bank's stance. He said that "using an inflation range is an option that could be reviewed," and that he doesn't see any threat to the dollar as a reserve currency.
Meanwhile, stocks fell in Asia, following the sour tone of Wall Street, although European indexes trade in the green, as the OECD urged China and the US to end their trade war before more damage is done to the global economy. The better mood came as the US rolled back some of the sanctions imposed on Huawei, as the Commerce Department granted the company a temporary license that grants operations between US companies and Huawei for the next three months. US Treasury yields ticked modestly higher, up for the week.
Japan's macroeconomic calendar had nothing to offer at the beginning of the day, and the US has little of relevance scheduled. It will publish today April Existing Home Sales, seen rising by 2.7% after falling 4.9% in March. Also, a couple of Fed's speakers are scheduled through the American afternoon.
The USD/JPY pair pressures the 61.8% retracement of its latest daily decline, headed north, according to technical readings in the 4 hours chart, given that the 20 SMA keeps advancing below the current level and providing intraday support. Technical indicators in the mentioned chart head higher within positive levels, although the 100 SMA caps the upside with a bearish slope at around 110.40. Chances of a firmer recovery would be higher on a break above this last.
Support levels: 110.00 109.65 109.30
Resistance levels: 110.40 110.85 111.10
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