- The USD/JPY outlook shows a loss of appeal for safe-haven currencies.
- China and the US finally agreed to pause the tariffs for 90 days.
- India and Pakistan agreed on a ceasefire.
The USD/JPY outlook shows a loss of appeal for safe-haven currencies like the yen amid easing trade and geopolitical tensions. China and the US have agreed on a 90-day pause on tariffs. Meanwhile, India and Pakistan have agreed on a ceasefire, while Russia is finally ready to meet Ukraine.
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Over the weekend, top officials from China and the US met to discuss trade policy. The trade war between the two countries started in early April. It has rocked financial markets, sending most away from the dollar and to safe-haven assets like the yen.
However, this changed on Monday as the dollar rallied and the yen collapsed. China and the US finally agreed to pause the tariffs for 90 days. Moreover, China is ready to cut the US trade deficit. The news boosted risk appetite and consumer confidence in US assets.
Furthermore, the yen suffered as India and Pakistan agreed on a ceasefire, pausing a war that had raised economic concerns. Moreover, Russia’s president finally agreed to meet Ukraine’s leader, raising hopes of another ceasefire deal. With geopolitical tensions easing, investors are becoming more confident. As a result, safe-haven assets like the yen are collapsing.
USD/JPY key events today
Market participants are not looking forward to any high-impact reports from the US or Japan. All focus will remain on US trade policy developments.
USD/JPY technical outlook: Solid rally meets the 148.02 key level
On the technical side, the USD/JPY price has rallied sharply to reach the 148.02 key level. At the same time, the price trades well above the 30-SMA, showing bulls have a strong lead. Moreover, the RSI trades in the overbought region, indicating solid bullish momentum.
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The price has maintained a bullish trend, making higher highs and lows. However, it paused at the 146.02 level, which was the previous high. The price eventually broke above with a solid bull candle, showing a surge in momentum. Given the solid bullish bias, the price might break past the 148.02 resistance to make new highs.
However, after such a sharp move, the rally might pause to allow the SMA to catch up before continuing higher. In such a case, the price could retreat to the 146.02 level.
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