As trade war resumes, it is having its effect on USD/JPY, which, due to yen’s safe-haven status, tends to slide in times of uncertainty. This has forced the pair to move lower and break the mid-term upwards moving trendline, taken from the low of the 25th of March, a break which increases the bearish sentiment and could lead to further declines.
Because the aforementioned upwards moving trendline has been broken, at this point, we will aim for lower levels. Yesterday, USD/JPY found its support at around the 109.35 mark, which if broken today, could open the way towards the 109.20 level, or slightly below that, the 109.00 zone. If the yen-buying continues, then the bears could drive the pair towards the 108.40 or even the 108.10 levels, the last being the lowest point in May.
Alternatively, a strong reversal back up to the psychological 110.00 level could spark the bull interest again, as the move would place USD/JPY above the previously mentioned trendline. If, eventually, we get a break above the 110.00, this could change the short-term outlook towards a more bullish one and the pair could start initially aiming for the 110.20 area, a break of which could move USD/JPY back up to the 110.75 zone. Just a few pips above lies another important level of resistance at 110.90, marked near the high the 15th of June.
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