USD/JPY clings to gains near weekly tops post-US GDP
- Positive trade-related headlines helped reverse early dip/regain traction on Thursday.
- In-line US GDP print underpinned the USD and remained supportive of the up-move.
- Sustained move beyond the 106.70-80 region needed to support any further gains.
The USD/JPY pair held on to its intraday gains near weekly tops – around the 106.40 region – and had a rather muted reaction to the US macro data.
After an initial dip to an intraday low level of 105.83, the pair regained some traction and turned positive - marking the third day of an uptick in the previous four - following some positive trade-related comments from the Chinese Commerce Ministry spokesman.
US-China trade optimism remained supportive
The latest optimism boosted the global risk sentiment and was evident from a bullish trading sentiment around equity markets, which undermined the Japanese Yen's safe-haven demand and helped the pair to break through 200-hour SMA resistance near the 106.00 handle.
The up-move was further supported by a goodish pickup in the US Dollar demand, which remained well supported by the revised US GDP report that showed economic growth in the second quarter of 2019 stood at 2.0% as against 2.1% estimated previously.
With Thursday’s key release out of the way, it will now be interesting to see if bulls are able to capitalize on the momentum or the pair meets with some fresh supply near the 106.70-80 horizontal resistance that has been capping any attempted up-move over the past two weeks or so.
Technical levels to watch