Trade talks and inflation: the USD/JPY sees an exciting weekly close

By Admiral Markets

Source: Economic Events May 10, 2019 – Admiral Markets’ Forex Calendar

The main focus in the USD/JPY switched to the trade talks between the US and Chinese after Trumps announcement of new tariffs on Chinese products from today

As a result, the USD/JPY took on bearish momentum, dropped below 110.00 and tested the important support around 109.70.

Today’s news will be concerned with what the talks between the US and China will deliver. In general, the fact that the Chinese Vice Prime minister Liu He went to Washington, D.C. to continue with negotiations despite the aggressive behaviour of US president Trump over the last days (examples: here and here) can surely be considered a sign of ‘goodwill’ from the Chinese, and a sign that they are very interested in seeing a deal realized together.

On the other hand, we are currently on the brink of disaster, and withdrawal from talks and negotiations by the Chinese seems to be a serious option.

If, as a result, financial markets are hit by a risk-off move, a push lower in the USD/JPY, with an initial target around 108.40 is very likely.

In addition to this, USD/JPY traders will closely monitor today’s inflation data from the US: inflation is expected to come in at 2.1% for April after the US annual inflation rate rose to 1.9% in March 2019, from a 2.5 year low of 1.5% in the previous month. If data disappoints, and come in at or below 2%, a drop in US-yields could result, delivering another potential bearish driver for USD/JPY.

If the USD/JPY can hold above 109.70 and push back above 110.00, with the currency pair taking on bullish momentum in the coming days, a push back towards 111.00 seems possible:

Source: Admiral Markets MT5 with MT5-SE Add-on USD/JPY Daily chart (between September 21, 2018, to May 9, 2019). Accessed: May 9, 2019, at 10:00pm GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2014, the value of the USD/JPY increased by 13.7%, in 2015, it increased by 0.5%, in 2016, it fell by 2.8%, in 2017, it fell by 3.6%, in 2018, it fell by 2.7%, meaning that after five years, it was up by 4.1%.

Investing in Forex with Admiral Markets

Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition!

Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter “Analysis”) published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

1. This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
3. Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter “Author”) based on the Author’s personal estimations.
4. To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
5. Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
6. The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
7. Any kind of previous or modeled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
8. The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.

Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.
Article by Admiral Markets

Source: Trade talks and inflation: the USD/JPY sees an exciting weekly close

---

Admiral Markets is a leading online provider, offering trading with Forex and CFDs on stocks, indices, precious metals and energy.