USDJPY recovered from three-year lows last week but struggles for direction these days as risk sentiment remains choppy amid contradictory political and economic signals. The pair has been oscillating around the 106.00 handle and has yet to confirm a break above this handle.
In the short-term, the greenback could make further attempts to regain ground but the pair remains vulnerable to further losses as risk aversion could reemerge at any point. Yesterday, Trump highlighted that any trade deal with China would be much tougher if he gets re-elected in 2020. The statement spurred increased investor concerns over the trade dispute and its long-term consequences.
It may happen that further threats from the US leader will follow as Trump wants Beijing to make concessions. Such tactics threatens to further derail the appeal of the greenback against the safe-haven Japanese yen, so the downside risks for the pair are still there. Technically, the inability to firmly settle above the 106.40 intermediate resistance could result in a break below 106.00 with the initial target around 105.60.
In the short-term, the greenback could make further attempts to regain ground but the pair remains vulnerable to further losses as risk aversion could reemerge at any point. Yesterday, Trump highlighted that any trade deal with China would be much tougher if he gets re-elected in 2020. The statement spurred increased investor concerns over the trade dispute and its long-term consequences.
It may happen that further threats from the US leader will follow as Trump wants Beijing to make concessions. Such tactics threatens to further derail the appeal of the greenback against the safe-haven Japanese yen, so the downside risks for the pair are still there. Technically, the inability to firmly settle above the 106.40 intermediate resistance could result in a break below 106.00 with the initial target around 105.60.