- USD/JPY popped onto the long-awaited 113 handle in the Tokyo open reaching a high of 113.03 and the best level since 18th July where the pair reached 113.17.
- According to the 4 hours chart, the risk remains skewed to the upside.
USD/JPY has been trading to the top-side in a progressive daily climb from down at 110.55 whereby the dollar has been picking up a safe haven bid and favouritism due to the divergence between the Fed and BoJ.
Trade wars continue to simmer away
Trade wars continue to simmer away but they took a back burner during Trump's address at the U.N., where he was effectively rejecting globalism and spoke of his disapproval with respect to OPEC and his allies decisions over the oil price, at the same time blasting the Iranian regime as well. Meanwhile, US yields continue to ratchet up, scoring a fresh high with the US Treasury yields adding 1-2bps across the curve with 10-year yields touching year-highs at 3.111%.
Japan and U.S. agree to expanded trade framework, including tariff talks, ahead of Abe-Trump summit
Meanwhile, Japan and the United States agreed on Tuesday to create a framework, including tariff talks, for expanding trade between the two countries: (Japan Times reports)
“We basically shared the view on a framework and steps for boosting bilateral trade,” Japanese economic revitalization minister Toshimitsu Motegi, who represented Japan at the New York meeting, told reporters after the one-hour talks.
USD/JPY levels
- Support levels: 112.45 112.15 111.80.
- Resistance levels: 113.20 113.50 113.90.
Valeria Bednarik, chief analyst at FXStreet explained that the pair is biased higher according to intraday technical readings, although still needs to clear July's high at 113.17 to attract more bullswith the upward movement then, with room to extend up to the 114.60/70 region, where the pair settled monthly highs back in December and January:
"In the short term, and according to the 4 hours chart, the risk remains skewed to the upside, as the price is comfortably consolidating near its recent highs and far above bullish moving averages, while the Momentum indicator is now at fresh weekly highs, bouncing from its mid-line as the RSI hovers near overbought readings with no signs of giving up."
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