FundamentalOverview

The USD is once againhigher across the board as Trump followed through with his threats and imposedtariffs on Canada, Mexico and China on Saturday. We saw also other marketslike the stock market opening with big gaps due to the negative macroeconomic implicationsof trade wars.

There’s still some hope inthe markets that the tariffs will be lifted quickly as the countries involvedwill get to a deal. In fact, today the focus will be on Trump’s talks withCanada and Mexico expected in the first half of the US session.

On the JPY side, not muchhas happened since the last BoJ policy decision where the central bank hiked interest rates by 25 bps as widely expected butdidn’t offer much in terms of forward guidance.

The latest TokyoCPI came in line with forecasts although a touch higher than the priorreading. This week we have the Japanese wage growth data, but the yen continuesto be driven more by the Treasury yields and the bouts of risk off sentiment.

USDJPYTechnical Analysis – Daily Timeframe

On the daily chart, we cansee that USDJPY continues to consolidate around the major trendline with the price now tradingback above it. The buyers will likely step in around these levels to positionfor a rally into the 160.00 handle. The sellers, on the other hand, will wantto see the price falling back below the trendline to position for the drop intothe 149.00 handle.

USDJPY TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee that the pair has been basically ranging for several weeks between the156.60 resistanceand the 155.00 support although we got two failed downside break outs. As theprice broke above the 155.00 level again, the buyers piled in for a rally intothe resistance. The sellers will need the price to fall back below the supportto regain conviction for new lows.

USDJPY TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, we cansee that we have a minor upward trendline defining the current bullish momentum.The buyers will likely continue to lean on the trendline to push into newhighs, while the sellers will want to see the price breaking lower to starttargeting new lows. The red lines define the average daily range for today.

UpcomingCatalysts

Today we have the US ISM Manufacturing PMI and Trump speakingwith Canadian and Mexican officials on the tariffs. Tomorrow, we get the US JobOpenings data. On Wednesday, we have the Japanese wage growth data, the US ADPand the US ISM Services PMI. On Thursday, we get the latest US Jobless Claimsfigures. On Friday, we conclude the week with the US NFP report.

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