USD/JPY shows signs of recovery, sticking to positive bias for the second consecutive session.
Rising from October's low, USD/JPY pair edged higher for second day straight to settle above 148.00 level. Recently, Japan's trade minister Yoji Muto was sent to the U.S. to negotiate with the U.S. officials in hopes to persuade them to exempt Japan from tariffs on cars and other products but he unfortunately failed to win any assurance. To add to the disappointment, Donald Trump had also stated a 25% tariff on imported foreign autos could be imposed in early April. Japan heavily relies on exports and tariff duties levied on automobiles could hurt its economy given the fact that U.S. is among its top consumers.
However, further depreciation of Japanese Yen is still out of the question as traders are pricing in a rate hike from Bank of Japan. From technical point of view, USD/JPY pair could face rejection at 148.65 level. The RSI also suggests that the pair has still not ended up in the oversold region, capping any potential upside.
USDJPY TECHNICAL ANALYSIS
Technical Structure: Recovering from 5 month low, Descending channel, Bullish candle on daily, Bullish Flag on 4H, Consolidation on 1H.
Primary Trend: Downtrend
Intraday Trend/ Intraday Strategy: Bullish to Neutral/ Buy on Support, Sell on Resistance
Major Support: 147.00, 146.45,145.15
Major Resistance : 149.60,150.30, 151.30
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