The 100-day MA is keeping the downside in-check
The market continues to wait for the imminent announcement that Trump will slap new round of tariffs on China and that continues to underpin the yen on the day. Add to the fact that Japan is reportedly in the firing line next, it’s adding for a second layer of tailwind for the currency.
That has seen USD/JPY fall on the day to a low of 110.38 but the pair now trades just above that around 110.50 levels. Right now, the pair continues to test the key daily support in the form of the 100-day MA (red line) @ 110.52. That’s what is helping to stall the downside move at the moment.
But we’re really only one bad trade headline away from breaking below that in my view. Trading today will be a little complicated with the non-farm payrolls report due in US trading but at the end of the day, sentiment will override that in my view because there’s nothing much for the jobs report to surprise markets these days.
If we do get the imminent Trump announcement of additional tariffs on China, that’ll sour equities sentiment even more than it already has and set up a good platform for the yen to run higher. However, looking at the way the market is positioning all of this it feels like if there isn’t an announcement in early morning US time, equities may start to turn higher and instead that will underpin yen pairs as we head into the weekend.
Though I must stress again, we’re only one bad trade headline from seeing the yen gain further and that will be a reason for USD/JPY buyers not to get too carried away.
Support– 110.48-52 (February high, 100-day MA)- 110.00 (bids, swing region)- 109.80 (200-day MA)- 109.40-50 (swing region)- 108.86-00 (50.0 retracement level on D1, bids)
Resistance– 109.98-06 (100-bar MA on H4, offers, 200-bar MA on H4)- 111.21-22 (100-hour MA, 200-hour MA)- 111.40-50 (swing region)- 111.70-80 (week highs, swing region)