USD/JPY Current price: 112.54
- US President Trump willing to drop Obamacare repeal to pass tax reform.
- Treasury yields advanced modestly, not enough to push the pair into bullish territory.
After falling to 111.88, a fresh November low, the USD/JPY pair recovered ground to end the US session at its highest for the day in the 112.50 region. The American dollar benefited from rallying equities and an uptick in Treasury yields. The 10-year note yield rose to 2.35%m the 2-year note yield was little changed at 1.71%, while the 30-year bond yield added a basis point to 2.79%. The positive mood was fueled by comments from US President Trump, who said he is willing to drop the Obamacare individual mandate repeal in the Senate plan, in order to pass tax reform. In the macroeconomic front, Japan released its October trade balance, which showed a surplus of ¥285.4B below market's expectations, although exports and imports continued growing at a solid pace during the month, also missing market's forecast. The country will release its All Industry Activity Index early Tuesday, seen at -0.4% in September from 0.1% in August. From a technical point of view, the ongoing recovery seems corrective, as the pair has trimmed just half of its Friday's losses. In the 4 hours chart, the price remains far below its 100 and 200 SMAs, with the shortest gaining downward traction above the larger, while technical indicators bounced from oversold readings, but remain below their mid-lines, all of which is not enough to confirm an interim bottom. The pair would need to extend its recovery past 113.00 to look a bit more constructive, thus long-term bullish will become only beyond 114.40.
Support levels: 112.30 111.95 111.50
Resistance levels: 112.60 113.00 113.45
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