"The [US-Japan] summit may be a quick attempt by Japan to deal with pressure from the United States to allow the yen to appreciate." – SMBC Nikko Securities (based on Reuters)
The US President Trump’s promise to reveal a tax plan in the upcoming weeks caused the Greenback to soar, reaching a one-week high against the Japanese Yen. Yesterday’s rally allowed the Buck to approach the six-week down-trend, which is expected to be put to the test today. The 20-day SMA is bolstering the trend-line, suggesting a breach is doubtful, unless another political event sparks USD-buying. In that case, the USD/JPY pair’s main target will become the cluster around 114.40, formed by the monthly PP and the weekly R1. Meanwhile, technical indicators are unable to confirm the possibility of another positive outcome, as they keep giving bearish signals.
Today 61% of traders are long the Buck, compared to 63% on Thursday. The number of buy orders inched up from 47 to 59%.