USD/JPY surrenders early gains to 2-week tops, slides back below 109.00 handle
|- US-China trade optimism continued weighing on the JPY’s safe-haven status.
- The USD/JPY pair once again struggled to find acceptance above 200-day SMA.
The USD/JPY pair surrendered a major part of its early gains to two-week tops and is currently placed near the lower end of its daily trading range, just below the 109.00 handle.
The pair added to the overnight positive move and gained some follow-through traction through the Asian session on Tuesday, albeit once again struggled to find acceptance above the very important 200-day SMA.
Bulls struggle to hold the pair above 200-DMA
Renewed optimism over a possible trade deal between the United States and China continued weighing on the Japanese yen's perceived safe-haven status and was seen as one of the key factors driving the pair higher.
It is worth recalling that China's announcement over the weekend to tighten intellectual property protection rules reaffirmed that the world's two largest economies might be very close to a "phase one" trade deal.
This coupled with possibilities of some short-term trading stops being triggered above the 109.00 handle (200-DMA) provided an additional boost and further collaborated to the momentum to an intraday high level of 109.21.
The uptick, however, lacked any strong bullish conviction, rather quickly ran out of the steam amid increasing conflict over the Hong Kong Human Rights and Democracy Act, which was unanimously passed by the US Senate last week.
It will now be interesting to see if the pair is able to attract some dip-buying at lower levels or repeated failures above a technically significant moving average point to the emergence of some fresh selling pressure.
Moving ahead, Tuesday’s US economic docket – featuring the release of the Conference Board's Consumer Confidence Index and Richmond Manufacturing Index – will now be looked upon for some meaningful trading opportunities.
Technical levels to watch
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