USD/JPY trades near the key hourly moving averages
Price continues to trade below the 100 and 200-hour moving averages since yesterday and sellers have been keeping up with defending the near-term bearish bias so far. But with the lack of escalation in global trade tensions, buyers are slowly looking poised to attempt and push price higher.
The yen did push a little higher early in the session - though not by much - and the lows tested the swing region support just under 111.00 before bouncing back higher. The pair now trades near the highs, although in a tight daily range, and is just under the confluence of the 100-hour MA (red line) @ 111.19 and the 200-hour MA (blue line) @ 111.18.
Stay below and the near-term momentum still favours sellers but buyers have been keen to defend any move to the downside so far in yesterday's trading and on Friday. The lack of developments/escalation on the trade front between US and China is helping a little as equities are more or less flat on the day as well so far.
If anything, this feels like the calm before the storm as traders are awaiting the next clue to come from the global trade front. NAFTA talks are set to only resume tomorrow while there's also still the threat of Trump officially announcing the $200 billion tariffs on Chinese goods later in the week.
That said, buyers will have to be cautious on those headlines - particularly the latter - as they could trigger shifts in risk sentiment in the market. For a downside move though, a break below Friday's low of 110.69 will be the signal that the pair will be on for a serious test of the daily support levels:
The daily support levels include the 2 February high @ 110.48, the 100-day MA (red line) @ 110.42, bids and swing region support @ 110.00, and the 200-day MA (blue line) @ 109.82.
As for topside levels, look out for resistance from the May high @ 111.40 followed by last week's highs around 111.70-85. Offers are then seen @ 112.00 as well.
