USD/JPY peeps above 100-week MA, Yen under pressure on trade headlines
- USD/JPY is flashing green, possibly on the back of trade optimism.
- The bulls need a convincing move above the 100-week average hurdle.
- The markets could offer US dollars on disinflation concerns.
The anti-risk Japanese yen is losing ground in Asia, pushing USD/JPY higher on positive trade-related news flow.
Trade optimism pushing yen lower
The yen is flashing red as the US-Iran war is likely averted, for now, and the US-China trade tensions continue to recede. The two nations are set to make their phase one trade deal official this week.
White House Economic Advisor, Larry Kudlow, has said over the weekend that everything is in place on the China trade deal, while the US Treasury Secretary Steve Mnuchin informed markets that there will be talks on the phase-two of the US-China trade deal when the Chinese delegates arrive on January 15.
Above 100-week MA
At press time, the pair is trading just above the 100-week average currently located at 109.56, having hit a low of 109.44 in early Asia.
The pair has failed multiple times to secure a weekly close above the key average since the last week of November.
The bulls, therefore, need a weekly close above the 100-week average. That would imply a resumption of the rally from August lows near 104.45.
Breakout may remain elusive
The pair may have a tough time confirming a breakout, as markets may offer US dollars on disinflation concerns.
The data released on Friday showed the average hourly earnings rose by just 2.9% year-on-year in December compared to the 3.1% projection. That was the first below-3% reading since July 2018.
Further, the Nonfarm payrolls showed the economy added 145K jobs in December, missing the expected print of 164K additions by a big margin.
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.
