USD/JPY recovers farther from multi-year lows on Trump’s positive trade-related comments
|- The incoming positive trade-related comments dented the JPY’s safe-haven demand.
- Improving global risk sentiment helped the pair to recover around 150-pips intraday.
- Investors now look forward to the US durable goods orders data for a fresh impetus.
The USD/JPY pair built on its goodish intraday bounce from multi-year lows, with bulls now looking to reclaim and extend the momentum further beyond the 106.00 handle.
The pair opened with a bearish weekly gap and subsequently slipped below the key 105.00 psychological mark in reaction to the US President Donald Trump's announcement on late Friday to raise existing tariffs on $250 billion worth of Chinese goods to 30% from 25% as of October.
The move came after China's retaliatory tariffs on $75 billion US imports, which continued boosting the Japanese Yen's safe-haven status and contributed to the pair's downfall to the lowest level since Nov. 2016, albeit positive comments by China's Vice Premier Liu He helped ease the bearish pressure.
Meanwhile, the latest leg of a sudden pickup came after Trump confirmed that China called the US negotiators last night and said that they want to come back to the negotiating table. The positive developments triggered a sudden turnaround in the risk sentiment and lifted the pair to session tops in the last hour.
It would now be interesting to see if the pair is able to capitalize on the positive momentum or meets with some fresh supply at higher levels as investors now look forward to a fresh batch of US economic data this week - starting with the US durable goods orders data later this Monday - for more insights over the impact of intensifying US-China trade war.
Technical levels to watch
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