USD/JPY pair offered after new trade war developments
|Traders bought the yen on Thursday and the USDJPY pair failed to hold daily gains as sentiment soured in the midday trading session. Agencies flashed news that Beijing revealed demand to agree to trade war truce, which included lifting of the Huawei ban.
According to the the report, this agreement would avert the next round of tariffs worth additional 300 billion USD. The US commented that the truce is possible, but not certain.
Investors reacted in a risk-off regime, thus stocks + JPY crosses fell and bonds rose, but the moves seemed short lived and dip buyers were quickly emerging, with stocks already bouncing higher from the lows.
Later in the day, the final revision of the US Q1 GDP is due, with market participants expecting the economic growth to stay at 3.1% annually. The GDP price index is seen accelerating slightly to 0.8% from 0.5% in the previous release.
Moreover, pending home sales for May will be released, which could also cause some volatility on the financial markets.
From the technical perspective, the greenback is trying to get back above the strong support level of 107.90. If bulls achieve this, the short-term trend could switch back to bullish, targeting today's highs of 108.10.
On the downside, the intraday support could be at around 107.60 and if the price declines below this zone, further drop toward 107.40 could occur.
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