Tuesday, November 5, 2019

USD/JPY

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Fundamental Highlights

The Dollar-Yen bulls cheer the increasing odds of a successful trade deal between the US and China. Additionally, the US administration’s consideration to remove some existing tariffs on Chinese goods seems to boost the recent risk-on sentiment. As a result, the US 10-year Treasury yields extend the previous run-up to 1.8% while Equities soar to new all-time highs. Also adding to the pair’s strength is the market’s support to the US Dollar after Friday’s more than expected NFP data. Furthering the greenback gains could be the latest comments from the San Francisco Fed’s Mary C Daly who turned down the scope of the US recession. Investors will now concentrate more on the US ISM Non-Manufacturing PMI as well as Markit Services PMI for October, while hoping it will not hurt this recent positive market sentiment.

Technical Analysis

The Dollar-Yen bounced strongly from the 200-day moving average and took out the 50-day moving average on its way to retest the recent highs. If this recent bullish momentum continues, it will likely retest 109.05 in today’s session and possibly extend its gains towards 109.29 in the upcoming sessions.

Support: 108.55 / 108.25
Resistance: 108.90/ 109.05

Chart (H4)
USDJPY