USD/JPY Current price: 107.40

  • Risk sentiment keeps swinging back and forth with US-Sino trade-related headlines.
  • US September inflation coming up next, core reading seen steady at 2.4% YoY.
  • USD/JPY to resume advance on a break above the daily high.

The USD/JPY has extended its weekly rally to 107.77 during Asian trading hours but quickly retreated to the current 107.40 area. Trade-related news continue to flood the news feeds and setting the market’s mood. Overnight, there was a spike of risk aversion amid market talks suggesting China lowered expectations for progress this week. Quickly afterward, the header was replaced by others indicating that US President Trump is reportedly considering to make concessions to China that includes exemptions from sanctions against Huawei and Chinese buying of agricultural goods. Markets are choppy ahead of some clarity on the matter, with the American dollar generally weak.

In the data front, Japan released at the beginning of the day the September Producer Price Index, which came in at 0.0% MoM, slightly better than the -0.1% expected, and resulted at -1.1% when compared to September 2018, beating the -1.2% expected. The US will release today weekly unemployment claims and the final version of September inflation, with the core CPI seen at 2.4% yearly basis.

USD/JPY short-term technical outlook

The USD/JPY pair is offering a neutral stance in its 4 hours chart, as it is trapped between moving averages, with the 20 SMA advancing below the current level and converging with the 200 SMA, and with the 100 SMA heading lower above the current level. Technical indicators retreated from daily highs to settle flat around their midlines. The pair could have room to advance if positive trade-related news push it back above the 107.55 level, the immediate resistance.

Support levels: 106.90 106.45 106.20  

Resistance levels: 107.55 107.80 108.10  

View Live Chart for the USD/JPY

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