Chair Powell later this morning
The USDJPY was thrown back lower after the new of China’s tariff retaliation on US goods. Stocks reversed. Yields are modestly lower with the 5 year down -2.2 bps now. Powell to come later this morning…
Technically, for the USDJPY, the pair earlier today was able to stretch above a topside trend line, and to new highs for the week (at 106.69). Those gains were erased on the announcement. The low has printed down at 106.38. The close from yesterday was at 106.39. So the gains were all erased. We currently trade at 106.44.
Above sits the 100 hour MA at 106.48. The price is trying to stay below that MA line now. If it can the sellers remain in control A move above and the broken trend line is at 106.61.
On the downside, a move into the red for the pair (below 106.39 and stay below) will then have the dual 200 hour MA and trend line at 106.312 currently. Below that and the low from yesterday at 106.239 will be targeted, with the low for the week at 106.15 another target.
Fed’s Mester might be keeping the pair bid as she is still somewhat hawkish (waiting to see what the data will show over the next few weeks before the meeting). Yesterday, regional Presidents of the Fed were also more unswayed by the risks from the tariff war.