USD/JPY finds support near 108.00 ahead of US data, eyes on trade
|- The pair dropped and tested the 108.00 handle, where met support.
- Yields of the US 10-year note ease to the 2.64% area.
- US ISM Non-manufacturing next on the US calendar.
The softer tone in the greenback coupled with declining US yields forced USD/JPY to drop to lows near 108.00 the figure in early trade, where it appears to have found some decent support.
USD/JPY looks to trade talks, US docket
After bottoming out in the vicinity of the 108.00 neighbourhood during early trade, the pair seems to have regained some buying interest and is now looking to reclaim the 108.40/50 band.
The recovery, as usual, tracks the bounce off session lows in yields of the key US 10-year reference, which met some upside pressure near 2.64%, or daily lows.
Optimism around the 2-day meeting in Beijing between the US and China on the current trade dispute has spurred a fresh wave of buying pressure in the risk associated complex, motivating spot to rebound from recent lows.
Moving forward, the US ISM Non-manufacturing will grab all the attention today following November’s Factory Orders.
What to look for around USD/JPY
This week’s trade talks would be crucial for the broad risk appetite trends in the global markets, as a positive outcome will surely add further upside pressure to the pair. On the opposite side, speculation over the ability of the Fed to fulfill its projection of 2 rate hikes this year and the probability of a technical recession in the US economy at some point in 2020 poses immediate risk for the buck. In addition, and bolstering the demand for the safe haven JPY, appears the view that the global economy could enter a downtrend in the medium term.
USD/JPY levels to consider
As of writing the pair is losing 0.13% at 108.38 and a break below 108.03 (low Jan.7) would aim for 107.51 (low Jan.4) and then 105.00 (2019 low Jan.2). On the upside, the initial hurdle aligns at 109.44 (10-day SMA) followed by 111.12 (200-day SMA) and finally 111.72 (high Dec.26 2018).
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.