Some US-China trade news has hit the newswires today, and they are mostly positive. A conference call is expected to hold between negotiators on both sides today, even as Huawei looks set to receive an extension of tariff waivers.
Early Friday, news emerged from Politico on a possible announcement from the United States (US) Department of Commerce that would provide a limited extension to waivers for blacklisted Chinese firm Huawei.
US Department of Agriculture (USDA) Under Secretary Ted McKinney recently stated in an interview on Commodity Week, that the US-China trade negotiators on both sides would hold a call on Friday. McKinney is also optimistic that there is “a greater than 50% chance” both sides would sign a deal.
These and other upbeat news are driving risk-on sentiment in the markets today, with USDJPY on bid once more.
The USDJPY has terminated its selloff for now and is trading higher on the day. We see a firm bounce from the 50% Fibonacci retracement support line, which also coincides with the bounce from the lower border of the rising wedge on the daily chart.
Bullish sentiment on the day as a result of the risk-on sentiment should be able to take this pair to the major resistance at 109.30, which continues to serve as the initial upside target.
An upside break of 109.30 opens the door to 109.94 and quite possibly 110.67 (78.6% Fibonacci retracement level).
On the other side of the coin, a breakdown of 108.40 (intraday support at the 50% Fibonacci retracement level) targets 107.40 and 106.86, in that order if downside momentum takes control once more.More content