USD/JPY stabilizing above 109.30 after 3-day slide, remains vulnerable to safe-haven flows

• Stock market indices globally stay in the red following Trump’s decision to cancel the summit with Kim Jong Un, the North Korean leader. 
• USD/JPY is currently supported at the 109.30 level but remains vulnerable to safe-haven flows stemming from the overall delicate geopolitical context. 

As the main stock market indices worldwide are in risk-off mode, the Japanese Yen has been benefitting from the risk-averse trade as a safe-haven currency. Trump’s cancellation of the historic meeting with Kim Jong Un along with the new US plan to impose 25% tariffs on imported vehicles increased the uncertainty among investors. Additionally, the lack of progress in the second round of the US-China trade talks saga keeps also investors on the edge.

Freshly released the US durable goods orders in April came below expectations at -1.7% versus -1.4% expected while core durable goods orders excluding transportation came above estimates at 0.9% against 0.5% forecast. The USD/JPY had a mild reaction to the upside but no follow-through. The pair is consolidating in the 109.50 area after three days of decline currently up 0.12% on Friday.

George Powell, Chairman of the Federal Reserve Bank is due to speak at 13:20 GMT. The policymaker will take part in a panel discussion on "Financial Stability and Central Bank Transparency" at Sveriges Riksbank’s 350th-anniversary celebration in Stockholm. As the speech is more likely ceremonial in nature, it is unlikely that Powell will reveal new information on monetary policy, especially after the release of the FOMC’s minutes this last Wednesday. 

USD/JPY 4-hour chart

The pair is trading below its 50 and 100-period simple moving averages (SMA) but above the 200-period SMA on the 4-hour chart. The main trend remains bullish but bulls will need to create a base in the 108.50-109.00 region to keep the market from falling further. Key supports are seen at the 108.64 swing low and at the 107.79 swing high while resistances are seen at the 109.50 swing low and the 110.00 handle.