The story continues for USD/JPY and the 110 handle this week
Buyers successfully broke back above the 100-hour MA (red line) earlier after numerous attempts over the past three trading days but gains remain capped as the 110.00 handle remains the important psychological barrier for USD/JPY at the moment.
As it stands, the focus for the pair remains on US-China trade talks with lower level discussions resuming today before Lighthizer and Mnuchin will be meeting with Liu He later in the week.
For the pair to break above 110.00, I reckon it would require some form of positive reinforcement of a deal before the 1 March deadline. Otherwise, it's hard to see risk assets and USD/JPY rally in a sustainable manner over the next few weeks.
But until trade talks are sorted out, expect plenty of push and pull around the 110.00 handle for USD/JPY to come this week as well - much like what we saw last week.
