USD/JPY at the mercy of the US-Chinese trade dispute
With the US Trade Talks to finish today, we want to take a look at the USD/JPY.
After tensions in the trade dispute between the US and China heated up again in the first half of this week, after news broke that the White House continues to consider capital control like limiting Chinese stocks in the US Government Fund or similar, the USD/JPY attacked the region around 106.80/107.00, but didn't break lower, but instead stabilised over the last days.
Nevertheless, when looking at the daily chart, we feel vindicated in an overall bearish outlook for the currency pair, at least as long as the USDJPY trades below 108.50/109.00.
And even if we get to hear any positive signs of at least a partial trade deal with the US and China negotiating topics like intellectual property or Government subsidies in the upcoming months respectively in 2020, a rather sooner than later attempt to break below 106.80/107.00 in the days to come remains a serious option.
A big driver here could be from the comments made by Fed chairman last Tuesday at a speech in Denver, where Powell said that the FED will resume Asset Purchases to prevent a cash crunch and bringing QE4 officially on the table (even though (surprisingly) emphasizing that it is not a QE).
With that in mind, we consider another attempt to break back below 106.80/107.00 with a significant higher probability than USDJPY trying to break back above 108.50/109.00.
This is still and especially true if any signs of risk aversion start to materialise where a next wave of selling could result in USDJPY being pushed below 105.80 and trigger further selling, quickly activating the region around 105.00 again.
Ready to take your trading to the next level? Find out how in Admiral Markets’ new webinar series Trading Spotlight, where our trading experts will be discussing risk management, trading psychology, and their top strategies for trading the world’s most popular markets - admiralmarkets.com/education/webinars/trading-spotlight-1
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
After tensions in the trade dispute between the US and China heated up again in the first half of this week, after news broke that the White House continues to consider capital control like limiting Chinese stocks in the US Government Fund or similar, the USD/JPY attacked the region around 106.80/107.00, but didn't break lower, but instead stabilised over the last days.
Nevertheless, when looking at the daily chart, we feel vindicated in an overall bearish outlook for the currency pair, at least as long as the USDJPY trades below 108.50/109.00.
And even if we get to hear any positive signs of at least a partial trade deal with the US and China negotiating topics like intellectual property or Government subsidies in the upcoming months respectively in 2020, a rather sooner than later attempt to break below 106.80/107.00 in the days to come remains a serious option.
A big driver here could be from the comments made by Fed chairman last Tuesday at a speech in Denver, where Powell said that the FED will resume Asset Purchases to prevent a cash crunch and bringing QE4 officially on the table (even though (surprisingly) emphasizing that it is not a QE).
With that in mind, we consider another attempt to break back below 106.80/107.00 with a significant higher probability than USDJPY trying to break back above 108.50/109.00.
This is still and especially true if any signs of risk aversion start to materialise where a next wave of selling could result in USDJPY being pushed below 105.80 and trigger further selling, quickly activating the region around 105.00 again.
Ready to take your trading to the next level? Find out how in Admiral Markets’ new webinar series Trading Spotlight, where our trading experts will be discussing risk management, trading psychology, and their top strategies for trading the world’s most popular markets - admiralmarkets.com/education/webinars/trading-spotlight-1
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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