USD/JPY drops to 200-hour MA on trade tensions
|- USD/JPY tested support at 200-hour moving average (MA) after the bear flag breakdown.
- US-China trade war fears have likely put a bid under the anti-risk Japanese Yen.
The bid tone around the Japanese Yen strengthened, pushing the USD/JPY pair down to 110.300 (200-hour MA).
At press time, the currency pair is trading at 110.35 and could find acceptance below the 200-hour MA as indicated by the bear flag pattern in the 15-minute chart.
The JPY likely picked up a bid on fears of a full-blown trade war between the US and China. The United States is due to levy tariffs on $34 billion worth of Chinese imports on June 6. Beijing has assured markets that it would not fire the first shot in the trade war with the US but has vowed to retaliate in kind.
So, it all depends on what Trump administration does on Friday. The decline in the USD/JPY indicates the markets have begun preparing for the worst.
USD/JPY Technical Levels
Resistance: 110.56 (50-hour MA), 111.12 (June 3 high), 111.40 (May 21 high).
Support: 110.30 (200-hour MA), 110.15 (100-day MA), 109.92 (50-day MA).
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