After the latest round of talks ended with no signs of a breakthrough, Trump unexpectedly escalated trade war with China. Overnight, the US President threatened to impose fresh 10% tariffs on another $300 billion of Chinese goods. As a result, risk aversion intensified across the global markets, lifting safe-havens including the Japanese yen.
Following the rejection from late-may highs around 109.30, USDJPY plunged below 107.00, down to more than one-month lows around 106.84. In the short-term, traders will be closely monitoring further developments on the trade front, with any signs of an aggressive reaction could increase the upside pressure on the Japanese currency. However, the pair may have a chance to trim losses should the US employment data exceed market expectations and trigger a dollar rally.
The technical picture has deteriorated after a break below the 107.00 handle. Should the greenback fail to hold above 106.77, the pair will register fresh 2019 lows. In the short term, USDJPY needs to regain the 107.00 level and close above 107.30 on a daily basis. By the way, a bullish NFP employment report could send the pair back above 108.00.
Following the rejection from late-may highs around 109.30, USDJPY plunged below 107.00, down to more than one-month lows around 106.84. In the short-term, traders will be closely monitoring further developments on the trade front, with any signs of an aggressive reaction could increase the upside pressure on the Japanese currency. However, the pair may have a chance to trim losses should the US employment data exceed market expectations and trigger a dollar rally.
The technical picture has deteriorated after a break below the 107.00 handle. Should the greenback fail to hold above 106.77, the pair will register fresh 2019 lows. In the short term, USDJPY needs to regain the 107.00 level and close above 107.30 on a daily basis. By the way, a bullish NFP employment report could send the pair back above 108.00.