USD/JPY is nudging towards a possible test of the 110.00 handle
The dollar is holding steady on the day and its advance against the rest of the major bloc is also helping to propel USD/JPY a little higher at the moment. The greenback is also trading at the highs against the likes of the aussie and kiwi currently with the former looking to hold a break below 0.7100.
All this comes as we see a decent advance in equities on the session. European stocks are mostly trading well in the green now with gains major indices posting gains between 0.5% to 1.0%. Meanwhile, US equity futures are also gaining some poise being up by 0.2% currently.
It is once again a story of the glass being half-full for now as Treasuries are still rather flat on the day. For a real risk trade break, we'll have to wait and see whether US traders concur with the sentiment here.
As for USD/JPY, price is now trading at the highs for the day but there is some minor resistance around 109.80-90 before the 110.00 level is tested again. Buyers are in near-term control as price holds above the 100-hour MA (red line) but I wouldn't be surprised if a drag in equities later will send price back to test that level in the session ahead.
Do note that there are also some decent expiries rolling off around 109.40-50 that is keeping price action to the downside in-check for the time being. In terms of risk events in the session to come, watch out for US PMI prints but also equities sentiment. The latter is going to be key once again in driving price action in the pair and if there aren't any further fresh developments in the US-China trade rhetoric, look towards earnings for some clues on direction. In any case, expect more choppy trading to come.
