USD/JPY clings to 108.00 despite risk-sensitive headlines

Markets show little attention to the news/headlines from South Korea and the Bank of Japan (BOJ) amid overall upbeat sentiment.
The US debt deal and trade positive catalysts please risk-takers.
Second-tier US data, trade/political news will entertain short-term traders.

Anil Panchal FXStreet

Despite recently released risk-sensitive news from South Korea and Bank of Japan (BOJ), not to forget on-going geopolitical tension concerning Iran, the USD/JPY pair remains modestly flash around 108.00 during early Tuesday.

South Korea recently fired a warning shot at Russian military plane while Bank of Korea (BOK) Governor Lee Ju-you reiterated support for losing monetary policy considering trade tussle with Japan.

It was also anticipated that the Bank of Japan (BOJ) will consider pre-emptive easing next week in order to achieve inflation target at the time Japanese Prime Minister Shinzo Abe’s recently victory further strengthens his call for October month tax hike.

Additionally, geopolitical tension concerning Iran continues despite the recent shift in the tone of the nation’s policymakers.

On the positive side, the US President Donald Trump’s readiness to fasten the process of allowing the license to do sell inputs to China’s Huawei brightens trade sentiment ahead of the next week’s US-China trade negations in Beijing. Furthermore, the lawmakers also agreed over a two-year debt/spending limit and further propelled the risk tone.

The US 10-year treasury yields gain nearly 1.5 basis points to 2.057% by the press time.

While trade/political headlines are likely to keep entertaining momentum traders, second-tier housing and manufacturing data from the US could offer intermediate trading opportunities to follow.

Technical Analysis

Unless successfully rising beyond 21-day exponential moving average (EMA) level of 108.07, chances of the pair’s run-up to 108.57/60 confluence comprising 50-day EMA and 2-month old descending trend-line seems less likely. As a result, 107.80 and 107.20 can keep being on sellers’ radar.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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