- USD/JPY navigates the lower end of the range in sub-106.00 levels.
- US-China trade dispute remains behind the pair’s price action.
- The 109.0 region keeps capping the upside for the time being.
Trade developments from the US-China protracted trade war and its impact on the prospects of global growth continue to rule the mood around the Japanese safe haven currency and stay as the exclusive driver of the ongoing ‘flight-to-safety’ stance in the globalized markets.
The exodus to safer assets has depressed US yields to fresh lows, hitting the buck and dragging USD/JPY to the area below 106.00 the figure, where it seems to have found some support, ahead of 2019 ‘flash crash’ at 104.65 (January 3).
On the technical view, and if the selling impulse gathers extra pace, USD/JPY should meet the immediate support at multi-month lows at 105.49 (August 7) ahead of the mentioned YTD low at 104.65 (January 3). In the meantime, spot needs to regain the upper end of the prevailing range in the 109.00 neighbourhood in order to mitigate the downside pressure and allow for a potential test of the critical 200-day SMA at 110.29 along with mid-May peaks in the 110.60 region.
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