USD/JPY: Ichimoku Cloud strategy playing into the bull's hands for a run to 78.6% Fibo retracement target of 112.55

USD/JPY has been testing the upside towards the 112 handle and topped out at 111.88.
USD/JPY currently trades at 111.85, up from a low of 111.72.
Ichimoku Cloud offering support on an hourly basis with daily and 4hr components aligned bullishly.
The price is climbing through the 4hr Tenken-sen to the upside and supported by daily Tenken-sen.

Ross J Burland FXStreet

USD/JPY was solid despite the sell-off on Wall Street overnight, as investors ponder as to whether a trade deal between the Chinese and US can realistically be salvaged this month.

Robert Lighthizer very cautious in his rhetoric last week, proclaiming that there is still a lot of work to do, including trying to resolve how structural reforms that China needs to adhere could be enforced. “If we can complete this effort - and again I say IF ... we might be able to have an agreement that helps us turn the corner in our economic relationship with China,” Lighthizer said in testimony to the U.S. House Ways and Means Committee last week - in stark contrast to yesterday's upbeat WSJ weekend article.

Wall Street closed in a sea of red / DJIA bears look to break 78.6% Fibo confluence support

Meanwhile, USD/CNH is bid up on the news that China has softened its growth projection for 2019 from 6.5% to 6-6.5%. This is giving the dollar a boost across the board and supporting the upside in USD/JPY.

USD/JPY levels

The Ichimoku Cloud is favouring a break of the 112 handle with the price supported on the 1hr cloud support and breaking up through the Tenken-sen baseline. The 4hr Tenken is being tested by the price as well with all other conditions met for a buy:

Price must close above the Cloud.
Cloud ahead must be bullish.
Conversion Line (Tenken-sen) is greater than the baseline.
Lagging Span is greater than or crosses above the cloud.

On a break of 112, there are good prospects for a continuation which would bring the Lagging Span on the daily chart through the cloud and point towards a sustained rally on the new handle towards the 78.6% Fibo retracement target of 112.55.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

GBP/USD loses momentum, flirts with 1.3200

GBP/USD is struggling to maintain its positive bias on Thursday, retreating toward the 1.3200 region in response to the pick in the buying interest around the Greenback. That said, Cable remains under scrutiny as cautious market sentiment keeps investors focused on the US-Iran conflict and political effervescence in the UK.

EUR/USD trims gains, challenges 1.1400

EUR/USD now gives away part of its earlier advance, receding toward the 1.1400 contention zone on Thursday. Meanwhile, the pair’s recovery comes amid extra losses in the US Dollar, at the time when while investors continue to monitor developments in the Middle East and sentiment surrounding global technology stocks.

Gold remains bid and close to $4,100

Gold accelerates its recovery and approaches the key $4,000 mark per troy ounce at the end of the week, adding to Thursday’s advance. However, expectations for a hawkish Fed remain steady and keep the yellow metal’s potential upside contained.

Crypto Today: Bitcoin at $60,000, Ethereum at $1,500, and XRP at $1 face a make-or-break test

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are trading in the red on Friday after three consecutive days of losses, testing their respective make-or-break support levels.

Week ahead – NFP report to challenge Dollar strength and the hawkish Fed

Dollar strength dominates markets, as the hawkish Fed overshadows geopolitics and lower oil prices. NFP week could drive September Fed hike expectations and boost market volatility. The euro lacks fresh bullish catalysts, all eyes on the preliminary inflation report and the ECB Forum.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.