USD/JPY finds support ahead of 113.50 post-China trade

The ongoing rally in USD/JPY, triggered by Trump’s latest talks of tax cuts in 2-3 weeks, lost legs near daily R1 located at 113.86, knocking-off the rate towards the mid-point of 113 handle, before finding some support that send the prices back above 113.60 region.

The spot sees volatile trades, initially driven by Trump tax cut talks led reflation trades and BOJ’s bond buying announcement, and regains poise amid improved risk sentiment after the Chinese Jan trade data witnessed a huge beat across all the main indicators.

Focus now remains on the developments surrounding Trump and Japan PM Abe’s meeting scheduled later today in Washington. While the US consumer sentiment data may also provide some impetus. The spot was last seen exchanging hands at 113.67, up +037% on the day, and looks for a retest of daily highs at 113.80.

USD/JPY Technical levels to watch 

The major finds immediate resistance at 113.80 (daily high). A break above the last, the major could test 114 (round number) and 114.46 (daily R2) beyond the last. While to the downside, the immediate support is seen at 113.55/42 (daily low/ 20-DMA) next at 113 (round number) and below that at 112.72 (10-DMA).