USD/JPY Breaks Higher Toward 2018 Highs, US-China Trade War Fears Cede

USD/JPY Rate Forecast Talking Points:

  • The ONE Thing: If FOMC minutes lifts US yields further, USDJPY continues its ascent. A current limiting factor appears to be the underperformance of emerging markets that could weigh on risk appetite, but the possibility of a full-blown reversal appears limited as the JP bond market volatility remains depresses as the US’ picks up.
  • USD/JPY Price Forecast:Identifying support in an uptrend, and holding a bullish bias should be easy with Ichimoku at your back. Support comes in at the 9- the 26-period midpoint at 110.27 and 109.53 respectively.
  • Not familiar with trade wars and their history? We got you covered

Monday’s price action saw USD/JPY trade to a four-month low on optimism that any tariff-induced trade war was on hold for now. The intraday high of 111.39 marked the highest price since January 18 and aligned with a rise in Japanese equities.

Coming up with reasons to be short USD/JPY is difficult work at a time like this when CFTC data shows that institutions continue to come off their extreme US Dollar short positions, and rising yields look set

Article source: https://www.dailyfx.com/forex/technical/home/analysis/usd-jpy/2018/05/21/Japanese-Yen-Rate-Forecast-USDJPY-Rises-on-Easing-Trade-Tension.html