USD/JPY holds weaker on trade tensions, sellers look to capture near-term control

Technical Analysis

Author: Justin Low | usdjpy

USD/JPY trades at session lows now, testing the 100-hour moving average

USD/JPY H1 17-05
Price is now trading to session lows of 109.58 and is testing the 100-hour MA (red line) as trade tensions between US and China help to underpin the yen at the start of the European morning. China sent out a firm message that it will not be negotiating with the US so long as the latter remains 'insincere' in trade talks, giving out the impression that the stalemate is going to drag on for a really long time.

As a result, USD/JPY has fallen off from highs of 110.03 earlier today and is now at the lows for the day as sellers attempt to establish a more bearish near-term bias.

There are some light bids also noted around 109.50 to add to support from the 100-hour MA above, but notably further support is only seen around 109.15-20 before the 109.00 handle will be called into question.

Much like yesterday, the sessions ahead will be more of a battle between greed and fear so be wary of any potential turnaround in risk during the hours to follow.

In the event of any shift in risk sentiment or reversal, there are large expiries rolling off today at the 110.00 handle which should help limit upside gains for the time being.

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