USD/JPY makes an early play for 107.00, but risk appetite may be short-lived
- The Dollar is lifting against the Yen as market sentiment swings to the risk side to kick off the week.
- The 107.00 area may not hold as broader markets await China’s rebuke of US tariffs.
The USD/JPY is looking for some drive before the Tokyo market session winds down, and the pair is looking to stage a capture of the 107.00 major handle to kick off the new trading week.
Monday is a thin showing on the economic calendar for both the USD and the JPY, and traders are looking risk-hungry following the US’ announcement of more possible tariffs against China which knocked risk appetite lower to end the week.
China still has yet to respond to President Trump’s latest portent, but China is still on a long holiday weekend, and markets may brace for China’s official reaction tomorrow when Beijing comes online for the week.
USD/JPY Levels to watch
The pair’s technical outlook remains unchanged, and as FXStreet’s Chief Analyst Valeria Bednarik noted earlier, “technically, the daily chart shows that the pair is still developing well below its 100 and 200 DMAs, while technical indicators remain within positive territory, the Momentum still heading north, but the RSI losing its positive slope. In the 4 hours chart, technical indicators retreated from overbought readings, but stalled their declines above their mid-lines, while the pair is developing above still directionless moving averages. Overall, the pair could be at the first stage of a more sustainable recovery, although some follow-through beyond 107.65, will surely help to convince bulls.”
Support levels: 106.75 106.40 106.00
Resistance levels: 107.30 107.65 108.00