- Lack of major negative news triggered a market move against the US Dollar.
- Thin economic line highlights political plays for fresh direction.
The USD/JPY pair trades little positive to 108.60 by the time Tokyo markets open on Monday.
Even though lack of fresh developments concerning the US-China trade tussle and absence of major data confined market moves at the week’s start, the US Dollar (USD) pullback pleased buyers of ex-greenback majors during early Monday.
India recently became the second Asian country, other than China, to levy tariffs on the US goods. The democratic country announced tariffs on 28 items from the US to retaliate against the Trump administration’s trade protectionism.
Elsewhere, Chinese media kept criticizing the US President Donald Trump and indicate fewer chances of a trade solution from the upcoming G20 meeting between the leaders of the US and China.
Additionally, Iran continues to flash red signals to the US as its semi-official news mentions the country’s readiness to take further steps against the previous nuclear commitments to retaliate against the US President’s stand.
Meanwhile, protests against the controversial extradition bill continue in Hong Kong but got little attention so far.
Risk tone remains modestly flat during very quiet trading session seeking fresh clues. The global benchmark for risk sentiment, the US 10-year treasury yields, clings to 2.092% by the press time.
While political plays concerning the US, China and Iran will keep remaining present to offer background music, the US NAHB housing market index and the NY empire state manufacturing index could entertain short-term traders. While manufacturing gauge is expected to decline to 12.75 from 17.80, the housing market index is less likely to deviate from 66.00 prior.
Pair’s gradual recovery off 107.80 might struggle to clear 108.80 – 109.00 area comprising current month high, 21-day simple moving average (SMA) and low of May 13, which if broken can accelerate the pullback towards late-May high surrounding 110.00.
Alternatively, 108.15 and 107.80 can act as immediate supports ahead of highlighting January 04 low near 107.45 that holds the gate for the pair’s downpour to 106.60 and 105.50 numbers to the south.
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