A brief and small reprieve for risk assets
The report here helped to see USD/JPY hit a session high of 110.85 from around 110.65-70 levels earlier as China offer some glimmer of hope for a trade deal to still come to fruition. That said, the reported trip is still only going to last for about a day and I doubt it’ll hold much significance considering the way things are developing.
Liu’s trip and meeting with US officials will most likely be more of a message deliverance rather than a detailed discussion so don’t expect trade talks to suddenly advance on the back of this week’s session.
The key level for USD/JPY today is the 100-day MA (red line) @ 110.62. The gap lower today already sees the pair pressured and continuing to trade lower but for now, buyers are still holding on to the key level.
If price breaks below that, the bias and momentum will shift towards sellers and that will put further pressure for the pair to extend to the downside.
The slight nudge higher in USD/JPY earlier also comes alongside a brief bump in E-minis:
However, with trade tensions still likely to stay nervy and jittery for quite some time yet, it’ll be hard to justify a sustained rally/retracement in risk assets in the near future.