Axiory Global Research Team
Axiory Global Ltd.
The financial markets continued in Monday's sell-off and the USDJPY pair dropped another 30 pips to change hands at around 108.70 during the US session.
Traders were nervous on Tuesday, which led to some profit-taking from the recent rally on US indices and other riskier assets also dropped after today's Trump announcement.
"I have no deadline, no. In some ways, I think I think it's better to wait until after the election with China," Trump told reporters in London, where he was due to attend a meeting of NATO leaders. "In some ways, I like the idea of waiting until after the election for the China deal. But they want to make a deal now, and we'll see whether or not the deal's going to be right; it's got to be right."
Moreover, markets had fallen sharply on Monday after Trump tweeted he would slap tariffs on Brazil and Argentina for what he saw as both countries' "massive devaluation of their currencies." The United States then threatened duties of up to 100% on French goods from champagne to handbags because of a digital services tax that Washington says harms U.S. tech companies.
Yesterday's daily candle looks like a large reversal bar - the bearish engulfing candle, which could lead to further losses. although these candles usually dont work, combined with the negative sentiment it could be a nice short signal.
The next support for the USDJPY pair might be at around 108.30, where previous lows are located. Dropping below this level could push the pair to 107.80.
On the other hand, the resistance seems to be at today's highs of 109.20 and afterward near 109.50. As long as the greenback remains below these levels, the outlook seems bearish.
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