USD/JPY reverses an early dip, back above 109.00 handle

Positive US bond yields underpinned the USD and helped gain some traction.
The upside is likely to remain limited amid persistent US-China trade uncertainty.
Wednesday’s US CPI print and Powell’s testimony will be eyed for a fresh impetus.

Haresh Menghani FXStreet

The USD/JPY pair reversed an early dip to weekly lows, with bulls making a fresh attempt to build on the momentum further beyond the 109.00 round-figure mark.

The pair on Tuesday failed to capitalize on its early uptick to the 109.30 region and finally ended lower for the third consecutive session amid fading optimism over the possibility of a US-China trade deal, which underpinned the Japanese Yen's safe-haven demand.

Focus on trade, US CPI, Powell’s testimony

The US President Donald Trump said on Tuesday that the US will increase tariffs on China in case the first step of a broader agreement isn’t reached. This comes on the back of Trump's indication over the weekend he would only sign if it was the “right deal” for America.

The comments weighed on investors' sentiment, which was evident from the prevalent risk-off mood around equity markets. However, a modest pickup in the US Treasury bond yields extended some support to the US Dollar and helped the pair to bounce off daily lows.

As investors await any further trade developments, the upside is likely to remain limited as market participants now look forward to the latest US consumer inflation figures and the Fed Chair Jerome Powell's testimony before determining the pair's next leg of a directional move.

Technical levels to watch

USD/JPY

Overview
Today last price	109.06
Today Daily Change	0.07
Today Daily Change %	0.06
Today daily open	108.99

Trends
Daily SMA20	108.75
Daily SMA50	108.09
Daily SMA100	107.67
Daily SMA200	109.03

Levels
Previous Daily High	109.3
Previous Daily Low	108.92
Previous Weekly High	109.49
Previous Weekly Low	108.1
Previous Monthly High	109.29
Previous Monthly Low	106.48
Daily Fibonacci 38.2%	109.06
Daily Fibonacci 61.8%	109.15
Daily Pivot Point S1	108.84
Daily Pivot Point S2	108.69
Daily Pivot Point S3	108.47
Daily Pivot Point R1	109.21
Daily Pivot Point R2	109.44
Daily Pivot Point R3	109.59

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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