USD/JPY bulls take control while awaiting US healthcare vote

Currently, USD/JPY is trading at 111.17, up 0.19% on the day, having posted a daily high at 111.20 and low at 110.85.

USD/JPY is bid in Tokyo while markets await for an outcome of the US healthcare vote; It is supposed to be on Friday in the US session. The Trump reflation trade is under threat while investors could quickly lose faith in the US president's original statements and plans to implement fiscal spending in the US this year once Obamacare has been repealed and replaced. The delays are a risk that could support further downside the greenback and in USD/JPY. JPY is up modestly vs the USD this week and has been outperforming all of the G10 currencies. Domestic developments in Japan have been limited and the yen is now trading well above levels implied by yield spreads. This could ultimately slow down further advances to the downside, especially in the event of a shift in the broader tone. 

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USD/JPY levels

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Valeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart, technical indicators remain within oversold territory, with the RSI indicator heading modestly lower at 27, while the 100 and 200 SMAs slowly turning south far above the current level. "Renewed selling pressure below 110.70 should open doors for a continued decline towards 109.90, the 50% retracement of the November/December rally."