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USD/JPY: bulls eye the 107.50 hard resistance

4/13/2018, 9:58:25 AMMarket Analysis
USD/JPY: bulls eye the 107.50 hard resistance

USD/JPY is slightly higher in the Tokyo open, currently, it is trading at 107.30, down -0.01% on the day, having posted a daily high at 107.37 and low at 107.20.

The US dollar was outperforming overnight with the DXY trading at the higher end of the 89.443 - 89.960 range. Trump was toning down the ante over Syria when he tweeted ”Never said when an attack on Syria would take place. Could be very soon or not so soon at all!” Trump has requested his advisors to investigate the US rejoining the Trans-Pacific Partnership after visits from senators and others explaining the impact of China’s retaliatory tariffs on the agricultural sector.  It was also reported that Trump was seeking an alternative strategy with respect to trade ties with China.

US could unveil new tariff list on China by next week - WSJ

USD/JPY and market reactions

USD/JPY rallied from 106.80 to a high of 107.42. The pair was testing the region of 107.50 and a hard resistance, (April high and 50% Fibo at 107.52). The US 10yr treasury yield climbed from 2.77% to 2.84% while the Fed fund futures yields rose as much as 4 basis points.

Wall Street stocks supported: no airstrike on Syria while earning season approaching

The tone on Wall Street was also improved with the S&P 500 Index, closing 21.80 points higher or by 0.8% to 2,663.99 while the Dow Jones Industrial Average gained 293.60 points or 1.2% to 24,483.05. The Nasdaq Composite Index gained 71.22 points or 1% and reached 7,140.25.

USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet explained that from a technical point of view, the pair retains its neutral stance, as in the 4 hours chart, the Momentum indicator remains flat around its 100 level, as the RSI turned lower around 55.  In the mentioned chart, the pair is still developing above its 100 and 200 SMA, both converging at around 106.20, becoming a line in the sand for future possible gains.