USD/JPY Rejects Key Resistance

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USDJPY Rejects Key Resistance

With the week drawing to a close, the rally that took USD/JPY above 110 is losing momentum. Investors are worried that President Trump will stir more trouble at the G7 meeting. He’s widely expected to stick with a hard line on trade, which would amplify criticism and retaliation by other foreign leaders. The pullback in USD/JPY today is driven by a decline in Treasury yields. Jobless claims and continuing claims also ticked higher. There are no U.S. economic reports scheduled for release tomorrow so there’s motivation for a further profit taking on long USD/JPY positions.

Technically, USD/JPY tested and rejected the 200-day SMA and the 61.8% Fib retracement of the December to March decline and is also struggling to hold above the 20-day SMA. The 1 hour, 4 hour and daily charts suggest a further pullback to 109.45 and possibly even a move down to 109.00

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