USD/JPY drops to one-week lows on trade war headlines

Stocks hit fresh lows and Yen gains momentum after Chinese officials cancel visit to view US agriculture.
USD/JPY consolidates weekly losses as risk sentiment deteriorates.

Matías Salord FXStreet

The USD/JPY fell during the American session following reports that the Montana Farm Bureau said China's delegation has canceled a planned trip to view US agriculture. According to the media, Chinese officials will return to their country sooner than expected. The pair dropped to 107.60, reaching the lowest level since September 16.

Gold prices rose and Wall Street turned red. The Aussie printed fresh lows across the board. The report triggered risk aversion at the end of the week and also after US President Trump mentioned that Chinese agricultural purchases will not be enough, adding he wants a complete deal.

Rally ends on central bank’s weeks

After hitting the strongest level in a month near 108.50, USD/JPY reversed and it is about to end the week lower, after Federal Reserve and the Bank of Japan meetings. Price found resistance around the 20-week moving average and the 108.50 barrier and turned lower.

Higher US yields failed to boost the Greenback. The prevailing precautions tone around financial markets added support to the Yen.

US-China trade tensions are likely to continue to be a key driver in USD/JPY. Regarding data next week, in Japan the flash PMI is due on Tuesday while in the US, the PMI will be released on Monday and on Friday PCE data. “Japan PM Abe and US President Trump might be signing a trade agreement at the United Nations General Assembly in New York. Japan has previously said it would be willing to consider a deal that would reduce agriculture tariffs to levels previously contemplated under the Trans-Pacific Partnership. For Japan, the key thing is that Trump does not impose national security tariffs on Japanese vehicles and auto parts”, explained analysts at Danske Bank.

Levels to watch

USD/JPY

Overview
Today last price	107.69
Today Daily Change	-0.33
Today Daily Change %	-0.31
Today daily open	108.02

Trends
Daily SMA20	107
Daily SMA50	107.11
Daily SMA100	107.99
Daily SMA200	109.32

Levels
Previous Daily High	108.48
Previous Daily Low	107.78
Previous Weekly High	108.26
Previous Weekly Low	106.76
Previous Monthly High	109.32
Previous Monthly Low	104.45
Daily Fibonacci 38.2%	108.05
Daily Fibonacci 61.8%	108.21
Daily Pivot Point S1	107.71
Daily Pivot Point S2	107.4
Daily Pivot Point S3	107.02
Daily Pivot Point R1	108.4
Daily Pivot Point R2	108.78
Daily Pivot Point R3	109.09

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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