USD/JPY Forecast: Trade war fears boost the JPY
|USD/JPY Current price: 108.85
- US President Trump keeps menacing several countries with tariffs.
- Equities extend their collapse, Wall Street set to open at almost a one-month lows.
- USD/JPY pressuring 108.80 support, room to extend its decline toward the 108.00 level.
The USD/JPY pair remains under selling pressure, having extended its decline to 108.82 following London’s opening. US President Trump continues triggering fear across the financial world, this time, menacing with slapping tariffs on France on goods worth $2.4 billion, in response to France's digital tax. The negative sentiment was exacerbated by comments from Trump, who said that he likes the idea of “waiting until after the election for the China deal, but they want to make a deal now and we will see whether or not the deal is going to be right.”
Asian equities followed the lead of Wall Street, which collapsed Monday, while European indexes are also under pressure, although mixed at the time being. Meanwhile, US Treasury yields ticked lower, with the yield on the 10-year note at 1.79% after peaking at 1.85% this week.
Japan published November Monetary Base, which increased by 3.3% YoY, better than the 2.6% anticipated by the market. The US will publish today the November ISM-NY Business Conditions Index, seen at 44.7, down from 47.7 in October.
USD/JPY short-term technical outlook
The USD/JPY pair is pressuring daily lows and bearish, according to the 4-hour chart, as it extended its decline below the 100 SMA, while the 20 SMA turned south well above the current level. The 200 SMA provides dynamic support at around 108.80. Technical indicators, in the meantime, maintain their strong bearish slopes, nearing oversold territory. A break below the mentioned 200 SMA, should lead to a steeper decline toward the 108.00 threshold.
Support levels: 108.80 108.50 108.20
Resistance levels: 109.30 109.60 109.90
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.