USD/JPY: major risk events ahead, market remaining on-guard sub 111 handle
Currently, USD/JPY is trading at 110.83, up 0.07% on the day, having posted a daily high at 110.93 and low at 110.66.
USD/JPY was up to test the 50 sma on the 1hr sticks at 110.89, but Tokyo is a subdued start and the yen takes back control with a slight offer in the open. The tone remains cautious and the yen's risk profile as a safe haven currency is playing out.
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The week ahead has a number of potentially significant events, including the FOMC minutes, the nonfarm payrolls at the end of the week and a potentially turbulent market around Trump-Xi meeting Thursday. "The planned meeting on Friday/Saturday between Presidents Trump and Xi Jinping is cited by newswires as another reason for nervousness in Asian markets, explained economist, Kit Juckes, Societe Generale, adding "the upshot is that the yen's at the top of the global FX charts."
USD/JPY levels
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USD/JPY is in a four-month decline from the highs of the 118 handle at the start of the year. The pair snapped the 20 monthly sma last month with daily ma's aligning into a bearish formation. the price is now trading below the 200-d EMA at 111.24 and daily RSI remains bearish. "Elliott wave counts are more negative and we are unable to rule out slippage to the 110.11 recent low and the 109.10 50% retracement and the 108.47 200 day ma," argued analysts at Commerzbank.
Valeria Bednarik, chief analyst at FXStreet offered a picture of the 4hr perspective:
"In the 4 hours chart, the 20 SMA turned sharply lower above the current level, crossing below the 200 EMA, whilst technical indicators have bounced modestly from oversold readings, rather reflecting the latest upward correction than suggesting further gains ahead. The immediate support comes at 0.7530, followed by the mentioned 0.7490."