USD/JPY: CFIUS headlines keeping traders on their toes, bulls holding above 200-D SMA

• USD/JPY needs daily closes above the 200-D SMA.
• USD/JPY capped out at 110.50 on Kudlow comments.

The JPY was leading in the European session but there was a big jump through the 200-D SMA on CFIUS headlines where Trump was seeking to keep investment environment in US open. USD/JPY rallied from 100 the figure to circa 110.40 but has hit a brick wall on Larry Kudlow, President Trump's chief economic adviser's latest comments. USD/JPY had dipped to 110.29, currently trading back at 110.38.

Kudlow said that Trump is retreating on China, and that was enough to send the NASDAQ lower, now up just a modest 0.04%, down from 7610.67 highs and now at 7,564.82. Trade rhetoric will continue to govern the stock markets and yen while traders continue to monitor the Committee on Foreign Investment in the U.S., or CFIUS recommendations and any additional powers and indeed Trump's subsequent orders. Eyes will also remain on Trump's hardline approach to EU trade relations, where, in respect to Harley-Davidson, he said that  If it moves overseas 'they will be taxed like never before!'.

Twitter-happy-Trump

His latest Tweet today saying that:

Harley-Davidson should stay 100% in America, with the people that got you your success. Ive done so much for you, and then this. Other companies are coming back where they belong. We won't forget and neither will your customers, of your now very HAPPY competitors. 

Elsewhere, a potential weigh on the dollar going forward comes in the Atlanta Fed GDPNow estimates for 2Q GDP growth now at 4.5% in its current model estimate, down from its last estimate of 4.7%. Also, US May pending home sales were -0.5% vs +0.5% expected.

USD/JPY levels

With that 110.20 taken out today, bulls still need to hold above it on a daily basis to open up risk towards May's 111.39 peaks. We then have the 111.50 as an option barrier. This was a level that stood strong previously, lying just above the 111.39 May high. It is a very congested area where the 161.8% of May low & 76.4% of the May drop was located. On the flipside, a break back below 110.00 opens the 109.70/80 level ahead of the Tenkan prop that is located at 109.19 -  this falls just below the 109.36 key June support. 108.10 is the May 29 low.