The USDJPY pair reversed an early downtick to 108.73 and has now moved into positive territory, recovering a part of the previous session's slide to over two-week lows.
February 1, GKFX – A late US Dollar rebound from the dovish FOMC-inspired drop to multi-week lows helped ease the bearish pressure on Thursday and stall the recent sharp rejection slide from the key 110.00 psychological mark.
US-China trade optimism dent JPY’s safe-haven status
The greenback built on the overnight bounce, which coupled with fading safe-haven demand, amid US-China trade optimism, undermined the Japanese Yen and helped reversed an early dip led by dismal Chinese PMI.
Following the conclusion of two-day high-level US-China trade talks, Xinhua reported that China agreed to increase imports of US agricultural, energy, service products and industrial manufactured goods.
The news raised market expectations of a possible trade deal, during a meeting between the US President Donald Trump and his Chinese counterpart, and kept fueling the prevalent risk-on mood across financial markets.
The pair might now be looking to build on the positive momentum further beyond the 109.00 handle as focus shifts to the keenly watched US monthly jobs report (NFP) for some fresh directional impetus.
USDJPY technical analysis
Any subsequent up-move beyond the mentioned handle is likely to confront some fresh supply near the 109.30-35 region, above which the pair is likely to make a fresh attempt towards reclaiming the 110.00 round figure mark.
On the flip side, the 108.80-75 region now seems to protect the immediate downside, which if broken might turn the pair vulnerable to break through the 108.50 support area and head towards testing the 108.00 handle.
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