USD/JPY bears run out of steam - target 111.88
- USD/JPY has been moved to the downside but sellers have run out of steam.
- Currently, USD/JPY is trading at 111.53 from a high of 111.65 and a Tokyo session low of 111.46 on news that the US and Japan will meet on the 21st Sep to discuss trade their relationship.
USD/JPY was picking up the bid to 111.64 the high although traders were unlikely to push much higher ahead of the PPI data tonight and CPI the following days. A key target would be the 61.8% of July-Aug drop at 111.88 and the funda behind it would be in rising US yields due to oil prices. WTI rallied hard to $69.76 and has stablised there.
- New chapter in the trade war saga - now its Japan under fire
Meanwhile, trade tensions have just picked up again with the US and Japan set to meet on the 21st Sep. However, Japan, unlike China, is a strategic partner and ally of Washington so there is more at stake here - The Pacific - ultimately Tokyo and Washington will have to find common ground.
USD/JPY levels
Valeria Bednarik, chief analyst at FXStreet argued that the current advance seems meant to continue, at least short-term, as the pair keeps pressuring the highs and advancing above its 100 and 200 SMA, both now converging around 111.05:
"In the mentioned chart, the Momentum indicator continues retreating from overbought readings, but the RSI indicator extends its advance, currently at 65, supporting additional gains moreover on a break above the 111.80 price zone, the immediate resistance, ahead of 112.14, August monthly high. In the meantime, US Treasury yields continue advancing, backing the ongoing rally in the pair."