USD/JPY bounces from 50-day MA after Chinese Vice Premier Liu He's remark on trade
- USD/JPY has bounced up from the 50-day MA support of 108.28.
- China's Vice Premier Liu He is cautiously optimistic about the prospects of the US-China trade deal.
- Related markets, however, are not buying Liu He's optimism.
USD/JPY eked out moderate recovery from the 50-day moving average support after China's Vice Premier and trade negotiator Liu He noted that he is "cautiously optimistic" about reaching a phase one trade deal.
The currency pair is currently trading at 108.49, representing a 0.13% drop on the day, having bounced from the 50-day moving average support of 108.28 in the last one hour.
With Liu He expressing cautious optimism on trade, some traders likely squared off long JPY trades, helping the pair chart a minor recovery. The futures on the S&P 500, however, are still reporting a 0.22% drop. Further, the Asian equities are down with Japan's Nikkei reporting a 1% drop.
The US 10-year treasury yield is also showing no sign of life. The yield is currently trading at two-week lows near 1.73%.
Put simply, the equity and bond markets are not impressed by Vice Premier Liu He's comments and continue to worry about the waning trade optimism amid escalating political tensions.
The USD/JPY pair, therefore, may fall back to the 50-day average at 108.28. However, if the equities recover, the pair will likely move into the positive territory above 108.60.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
