USD/JPY Tests Double Bottom - Safe Haven Appeal at Peak!

EagleFX Team EagleFX

USD/JPY was closed at 108.632 after placing a high of 109.206 and a low of 108.482. Overall the trend for USD/JPY pair remained Bearish that day. At 4:50 GMT, the Annual Monetary Base from Japan came in as 3.3% against the expectations of 3.4% it has null-effect on USD/JPY on Tuesday.

10-year US Treasury Yields fell to the lowest level of the month at 1.70% and weighed on the greenback. US Dollar remained weak on Tuesday amid the risk-off mood in the market and put pressure on the prices of USD/JPY pair.

Due to increased trade tensions from back to back tariff fires from Trumps’ administration across the globe, demand for dollar in the market decreased. On Monday, Trump announced tariffs hike on Steel and Aluminium imports from Brazil & Argentina in response to the devaluation of the currency by them. Trump accused Argentina and Brazil of hurting American farmers through currency manipulation.

And on Tuesday, Trump announced to impose tariffs on French Goods against the digital tax duty. US claimed that the tax duties by the EU unfairly discriminate against large US Tech Companies, and in retaliation, he announced to impose tariffs on French Goods.

In last week, Trump announced to increase tariffs on Chinese goods if China failed to sign a Phase-one deal before mid-December, which is highly unlikely under current circumstances.

These back two back tariff fires from Trump has raised the questions on Trump administration’s credibility and decreased the demand of US Dollar in market.

Adding in the downward pressure on USD/JPY prices was the latest comment of Trump on the US-China trade deal on Tuesday. US President Donald Trump has said that the trade deal with China might have to wait until after the US presidential election in November 2020. This news damaged the positive hopes of traders that the two largest economies would soon sign the phase-one deal to ease their damaging trade war.

These statements from Trump remained under headlines and caused a decreased demand for riskier assets like USD/JPY, which resulted in the drop of pair to 108.4 level.

Support	Pivot Point	Resistance
108.34	108.77	109.06
108.06		109.49
107.34		110.21

Technically, the USD/JPY has entered the oversold zone, as we can see on the RSI and MACD indicators. The pair has test the support zone at 108.420. Above this, the USD/JPY has closed a long bullish candle, which may drive some bullish moves in the market today.

USD/JPY - Trade Setup

Buy Limit 108.550

Take Profit 109

Stop Loss 108.200

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Author

EagleFX Team

EagleFX

EagleFX Team is an international group of market analysts with skills in fundamental and technical analysis, applying several methods to assess the state and likelihood of price movements on Forex, Commodities, Indices, Metals and

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