With not a lot of major data on the docket, I’m setting my sights on a possible wedge on USD/JPY’s chart.
Do you think the pair can sustain an upswing?
Before we talk chart levels, lemme show you the biggest headlines from the Asian session:
- US budget deficit climbs to record USD 2.81T, annual deficit may get doubled than all-time high
- UK housing boom gathers pace, but fears of a bust grow too: RICS
- U.S. ups France, Germany heat with tariffs in Airbus dispute
- Record prices for zucchini and cucumbers during Australian imports ban
- Relief talks stumble again as Trump asserts a deal is ‘not going to happen’
- Japan’s producer prices up for 2nd month in a row
- Australia’s job market absorbs Victoria’s virus relapse
- Asian stocks grind higher, dollar slips as U.S. data brightens mood
Upcoming Potential Catalysts on the Economic Calendar:
- Germany’s final CPI and WPI at 6:00 am GMT
- U.S. initial jobless claims at 12:30 pm GMT
What to Watch: USD/JPY
Earlier today we saw the dollar take hits against its higher-yielding counterparts as risk-takers take cues from a positive U.S. session trading.
In USD/JPY’s case, the anti-dollar sentiment translated to the pair finding resistance at the key 107.00 psychological handle.Will the bounce motivate enough bears to drag the pair lower? Take note that USD/JPY is trading in a potential wedge with an ascending trend line support hanging near the 100 and 200 SMAs.
Momentum traders can take advantage of the dollar weakness and aim for the trend line support around the 106.50 zone.
But if we see positive news about the U.S. initial jobless claims or the stimulus deal that lawmakers are working on, then we could see USD/JPY retest the 107.00 – 107.50 area of interest.