The USD/JPY pair held on the defensive through the Asian session on Friday, albeit remained well within this week's broader trading range.
February 8, OctaFX – Yesterday, Wall Street had its worst day this year after Donald Trump said he would not meet China’s Xi Jinping before the March deadline. This raised chances that a deal between the two countries on trade will not be made.
This year, the two countries have been holding meetings to iron out key issues on trade. However, reports show that no major progress has been made on the issues of intellectual property and forced technology transfer. If there is no deal between the two countries by March 1, the US will add more tariffs on Chinese goods.
The Japanese yen was little moved after the release of key numbers from the country. In December, household spending increased by 0.1%, which was better than the contraction of -0.6% in November. It was, however, lower than the expected 0.8%.
On a MoM basis, spending declined by -0.1%. The adjusted current account for the country was 1.56 trillion yen, which was better than the expected 1.52 trillion yen. Wages increased slightly to 1.8% from the previously released 1.7%.
USDJPY Technical Analysis
This year, the USDJPY pair has been in consolidation mode, with the price remaining within a narrow channel. The pair is now trading at 109.77. On the daily chart, this price is along the 25-day EMA and below the 50-day and 100-day EMAs while the RSI has been largely unmoved at the 47 level. This consolidation could lead to a sharp movement in either direction in the coming few days.
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