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Thomson Reuters
Sep 13 - 02:36 PM
USD/JPY - COMMENT-US-China Trade Thaw Hopes Rekindle USD/JPY Rally Bid
First appeared on eFXplus on Sep 13 - 11:10 AM

Receding U.S.-China trade war tensions, and tamer emerging market fears, have siphoned off yen haven bids to let loose USD/JPY's rally, but a close above 111.65/88 remains key to building momentum.
Below-forecast U.S. CPI only briefly pulled it back below that August-September downtrend line and key Fibo hurdles there.
The rally has since resumed, clearing the 61.8 percent Fibo of the July-August drop at 111.88 Fibo.
Slightly eased
concern about Fed tightening and EM currencies, amid a broader USD pullback, could keep risk aversion at a low enough ebb to maintain USD/JPY support.
CPI was only a pip off expectations and Fed hikes remain in prospect, so the rate-spread-driven dollar bulls may win out. They need a close above 111.88 to put July's 113.18 high by long-term resistance in play.
A $1.7bln expiry at 112.50 at the NY cut offered early NY support.
With the August-September trendline cleared, Treasury yields rebounding from the post-CPI dip and S&P's on the rise, the uptrend off this month's low looks intact while closes remain above the 100-DMA, last at 110.62.
Even Trump's latest tweet on trade hasn't hurt prices today.

Chart: Click here

Thomson Reuters IFR Markets


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