USD/JPY picks up bids above 106.00 amid upbeat risk tone
- USD/JPY prints three-day winning streak while attacking 106.50.
- Upbeat Japanese PPI, vaccine news become latest catalysts to watch.
- US-China trade deal talks, US push for COVID-19 cure and mixed American data played their parts earlier.
- Japan’s Leading Economic Index, US Durable Goods Orders to decorate the calendar.
USD/JPY bulls pierce 106.50 as markets in Tokyo open for Wednesday’s trading. The pair’s 0.13% intraday gains follow the previous two-day winning streak as market sentiment stays positive amid hopes of an early cure to the coronavirus (COVID-19). Also supporting the run-up could be the latest optimism surrounding the phase one trade deal between Washington and Beijing.
In doing so, the pair ignores upbeat prints of Japan’s Corporate Service Price Index (mostly known as services PPI) for July. The economic figures rose past-0.8% YoY prior to 1.2% during the previous month.
Markets remain hopeful…
With the UK government’s funding for the University of Cambridge’s COVID-19 vaccine trials following the American rush for the pandemic’s cure, global market players remain hopeful that the remedy of the deadly virus will soon arrive. Also propelling the risk-on mood is the latest optimism concerning the Sino-American trade deal that once lost its importance due to the difference among the world’s top two economies.
Against this backdrop, S&P 500 Futures gain 0.10% to 3,445 even if Japan’s Nikkei 225 drops 0.12% to 23,275 by the press time.
Looking forward, traders will have Japan’s July month Leading Economic Index, expected to remain unchanged at 85, before the US Durable Goods Orders that can ease to 4.3% from 7.6% during the previous month.
It should, however, be noted that the major attention will be given the risk catalysts while the wait for the Jackson Hole Symposium challenges the market optimism.
Technical analysis
A clear break of 50-day EMA, at 106.50 now, becomes necessary for the bulls to attack the falling trend line from July 01, currently around 106.80. On the contrary, a downside break of a 21-day EMA level of 106.17 will highlight the monthly support line near 105.50/45.
Reprinted from FXStreet,the copyright all reserved by the original author.
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