Sample Category Title

The US dollar is trading back above the 110.00 level against the Japanese yen currency following a renewed bid tone surrounding the greenback. If USDJPY bulls can continue to hold price above the 110.00 level we may see another technical attempt towards the resistance 110.60 level. The 109.66 support level now becomes the key weekly pivot point for the USDJPY pair.

The USDJPY pair is only bearish while trading below the 109.66 level, key support is found at the 109.00 and 108.40 levels.

If the USDJPY pair holds above the 109.66 level, key intraday resistance is found at the 110.00 and 110.60 levels.

Daily Pivots: (S1) 0.6855; (P) 0.6877; (R1) 0.6889; More...

A temporary lot is formed at 0.6864 with today's strong recovery. Intraday bias in AUD/USD is turned neutral for some consolidations first. Nevertheless, upside should be limited by 0.6988/7069 resistance zone to bring fall resumption. On the downside, break of 0.6864 will turn bias to the downside and extend the fall from 0.7295 to 161.8% projection of 0.7295 to 0.7003 from 0.7205 at 0.6733, which is close to 0.6722 low.

In the bigger picture, with 0.7393 key resistance intact, medium term outlook remains bearish. The decline from 0.8135 (2018 high) is seen as resuming long term down trend from 1.1079 (2011 high). Decisive break of 0.6826 (2016 low) will confirm this bearish view and resume the down trend to 0.6008 (2008 low). However, firm break of 0.7393 will argue that fall from 0.8135 has completed. And corrective pattern from 0.6826 has started the third leg, targeting 0.8135 again.

Australian Dollar open generally higher this week as traders cheer election results over the weekend. Canadian Dollar is also firm after USMCA members reached an agreement to remove steel tariffs and retaliations. Risks sentiments are steady in mixed Asian markets. Nikkei closed mildly higher following much stronger than expected Q1 headline GDP. Nevertheless, stocks in Hong Kong, China and Singapore are in red. In the currency markets, Swiss Franc, Euro and Yen are trading generally

Technically, AUD/USD should have formed a temporary low at 0.6864. Some consolidations might be seen but there is no indication of bullish reversal yet. Similarly, EUR/AUD has formed a temporary top at 1.6262 but outlook will stay bullish as long as 1.5959 resistance turned support holds. EUR/USD is extending the decline from 1.1263 and might be heading to retest 1.1111 low. GBP/USD's fall is also in progress on Brexit uncertainty.

In Asia, Nikkei closed up 0.24%. Hong Kong HSI is down -0.67%. China Shanghai SSE is down -0.56%. Singapore Strait Times is down -0.77%.

Australian Dollar rebounds on election results, upside capped by RBA and trade

Australian Dollar spikes higher today after the central-right coalition's surprising victory in the elections over the weekend, securing an outright majority too. The Liberal-Party led coalition is seen by some economists as better manager of the economy. Also, returning to power, the coalition will continue with their promised tax cuts on July 1. That's seen by some as stimulus equivalent to a 25bps rate cut, without the cut of course.

Nevertheless, upside in Aussie is so far limited. There are two major factors that's clouding the outlook. Firstly, RBA Governor Philip Lowe Philip Lowe will deliver a speech on Tuesday. After surprised jump in unemployment rate in April, there are speculations that Lowe could make use of the occasion to chart out the course for rate cuts in the second half of the year. Secondly, after recent escalations in US-China trade war, there is only one way to go in tensions between the two countries. Relationships will only worsen.

Japan reported strong 0.5% headline GDP growth, but consumer and business spendings contracted

Japan's economy showed surprising resilience even though there were speculations of contractions. Q1 GDP grew 0.5% qoq versus expectations -0.1% qoq. Annualized, GDP grew 2.1%. However, the details are rather weak indeed. Consumer spending dropped -0.1% qoq. Business spending also dropped -0.3% qoq. Exports also had the biggest contraction since 2015. The figures argue that Japan might be entering into a mild recession

Economy Minister Toshimitsu Motegi, nevertheless, hailed that Japan's economic fundamentals remain sound, supported by strong domestic demand, which is continuing up trend. Also, employment and income environments have improved while corporate profits are high.

Though, the government will watch the impact of trade tensions carefully. Exports are already slowing, and output remains weak due to China's economic slowdown. Some manufacturers are also delaying capital spending, leading to decline in capital expenditure.

USTR Lighthizer said to meet Japan Motegi on May 24, dashing to close trade deal

It's reported, without confirmation yet, US Trade Representative Robert Lighthizer will travel to Japan on May 24. He will meet Japanese Economy Minister Toshimitsu Motegi to resume trade negotiations. Trump declared auto-imports as threat to national security last week. And Lighthizer will have 180 days to complete the trade agreement. Otherwise, Trump might start imposing tariffs on autos and parts from Japan.

The claim of auto imports as national security threat to US infuriated Japanese maker Toyota Motor.  Toyota said in a statement that Trump's proclamation "sends a message to Toyota that our investments are not welcomed, and the contributions from each of our employees across America are not valued."

Toyota added "our operations and employees contribute significantly to the American way of life, the U.S. economy and are not a national security threat". Toyota added that "history has shown" that limiting imports is "counterproductive in creating jobs, stimulating the economy and influencing consumer buying habits." "If import quotas are imposed, the biggest losers will be consumers who will pay more and have fewer vehicle choices."

Trump wants an unfair deal with China, but farmers just want level playing field

Trump revealed that he has been pushing for an unfair trade deal with China, before the negotiations collapsed. In an interview with Fox News Channel aired on Sunday, Trump said he told Xi the agreement "can't be like a 50/50 deal". And, " you are so far ahead from presidents that allowed you to get away. This can't be a 50/50 deal."

He further claimed: "We had a very strong deal. We had a good deal, and at the end, they changed it. And I said, that's OK, we're going to tariff their products". And, "it hurts China so badly."

Trump also talked about his subsidy plan to farmers. He noted conversations with farmers as they said "Sir, we don't want a subsidy. We just want a level playing field. And we also know that we're being killed by these countries -- by many of the countries, not just China."

Looking ahead

Some central bank activities will be closely watched. RBA minutes will be scrutinized for hints on rate cuts in the second half of the year. BoE inflation report hearing will be important. Yet, the key for Sterling's outlook is in Brexit. Hence, the hearing might be a non-event. FOMC minutes will catch a lot of attention. Fed Chair Jerome Powell talked down the chance of a rate cut after last meeting. Recent comments from Fed officials also suggest that there is no case for a cut yet. But they came before escalation of trade war with China. ECB minutes will also be featured but the central bank has been rather clear in its communications. So, we're not expecting something ground breaking.

O the data front, Eurozone PMIs and German Ifo could be the most market moving. Euro would be vulnerable if PMIs suggest that the worst in slowdown is not over. Canadian Dollar will look into retail sales for the needed commitment from traders for a breakout. UK CPI and retail sales, New Zealand trade balance and US durable goods orders will also be watched closely.

Here are some highlights for the week:

• Monday: Japan GDP; Germany PPI, Eurozone current account.
• Tuesday: RBA minutes; BoE inflation report hearings; Eurozone consumer confidence; US existing home sales
• Wednesday: New Zealand retail sales; Japan trade balance, machine orders; Australia construction work done; UK CPI, PPI, public sector net borrowing; Canada retail sales; FOMC minutes;
• Thursday: Japan PMI manufacturing; Germany GDP final, Ifo business climate; Eurozone PMIs, ECB minutes; US jobless claims, PMIs, new home sales;
• Friday: New Zealand trade balance; Japan CPI, all industry index; UK retail sales; US durable goods orders;

AUD/USD Daily Outlook

Daily Pivots: (S1) 0.6855; (P) 0.6877; (R1) 0.6889; More...

A temporary lot is formed at 0.6864 with today's strong recovery. Intraday bias in AUD/USD is turned neutral for some consolidations first. Nevertheless, upside should be limited by 0.6988/7069 resistance zone to bring fall resumption. On the downside, break of 0.6864 will turn bias to the downside and extend the fall from 0.7295 to 161.8% projection of 0.7295 to 0.7003 from 0.7205 at 0.6733, which is close to 0.6722 low.

In the bigger picture, with 0.7393 key resistance intact, medium term outlook remains bearish. The decline from 0.8135 (2018 high) is seen as resuming long term down trend from 1.1079 (2011 high). Decisive break of 0.6826 (2016 low) will confirm this bearish view and resume the down trend to 0.6008 (2008 low). However, firm break of 0.7393 will argue that fall from 0.8135 has completed. And corrective pattern from 0.6826 has started the third leg, targeting 0.8135 again.

Economic Indicators Update

• Rates: Cautiousness key as trade spat simmers
  Global core bonds closed Friday's session nearly unchanged as headlines on international trade were mixed. Sentiment is mixed overnight as investors remain cautious, awaiting the next update in the US-Sino trade dispute. The eco calendar offers no guidance. We uphold our upward bias for core bonds today.
• Currencies: Dollar retains the benefit of the doubt, at least for now.
  At the end of last week, the dollar profited from a rise in interest rate support as US eco data printed solid. However, the dollar probably won't get additional interest rate support as uncertainty on the trade conflict persists. For now, the dollar enjoys some kind of by-default bit. The EUR/USD 1.1110 support is again coming within reach.

The Sunrise Headlines

• US stock markets eventually failed to overturn opening losses (-0.5%) despite a very strong May Univ. of Michigan consumer confidence. Asian bourses are mixed this morning with China underperforming as Huawei feels the trade heat.
• Austrian President Kurz called snap elections in September after the government collapsed over a fraud-related scandal about the country's far-right vice-chancellor Strache (head of coalition partner Freedom Party).
• Australian PM Morrison's Liberal-National coalition government surprisingly secured a national election win despite trailing opposition Labor for most of the past two years in the polls. AUD/USD rose back above 0.89.
• Saudi Energy Minister al-Falih sounded in favour of keeping production cuts in place. Global oil supplies are “plentiful” and inventories need to shrink. Brent crude found its way back above $73/barrel, closing in on the cycle peak.
• The Japanese economy grew faster than expected in this year's 1st quarter (0.5% Q/Q vs -0.1%). However, public spending, rising inventories and net exports (imports falling faster than exports) fuelled the rise.
• Exit polls indicated that Indian PM Modi's BJP-led National Democratic Alliance coalition will retain power, securing 306 seats in India's 543-seat lower house. INR and Indian stock markets rally this morning.
• Today's is very thin with only Belgian consumer confidence. Fed Harker, ECB Praet and BoE Broadbent are scheduled to speak..

Currencies: Dollar Retains The Benefit Of The Doubt, At Least For Now

USD maintains benefit of the doubt…

On Friday, global risk sentiment remained fragile as China showed reluctant to continue trade talks as the US put the country under pressure with multiple, punitive measures of late. EUR/USD, USD/JPY and EUR/JPY initially developed a mild downtrend. Later in US dealings, the Michigan consumer confidence printed very strong, tilting the balance in favour of the dollar. USD/JPY rebounded to close at 110.08. EUR/USD was pushed to new intraday lows and finished the day/week at 1.1158.

This morning, Asian markets are again trading mixed as investors await the next developments in the US-China trade war. Japan Q1 GDP printed at a stronger than expected (2.1% Q/Qa), but details (consumption and investments) were weak as expected. As usual, the impact on the yen was modest. USD strength prevails this morning. USD/JPY is trading in the 110.20 area. EUR/USD hovers just above the mid 1.11 area. The Aussie dollar jumped higher (AUD/USD 0.6920 area) after the victory of the Liberal-National coalition in the parliamentary election.

Later today, the eco calendar is very thin. The Chicago Fed activity index is no market mover. At the end of last week, the decline in US yields slowed/bottomed, at least for now. This process might continue today as US equity futures show a cautiously positive start for risky assets. However, trade tensions might return at any time and markets are still pondering the consequences of the recent escalation for the global/US economy and for Fed policy going forward.

At the end of last week, the dollar outperformed the yen and the euro. However, the risk context suggests that further USD interest rate support won't be evident. If so, it is in the first place a negative for USD/JPY. The picture for EUR/USD is more mixed. Selling pressure from EUR/JPY might make a EUR/USD rebound more difficult. Even so, we maintain the working hypothesis that the EUR/USD 1.1110 level won't be easy to break without real negative EMU news. On Friday, sterling lost further ground as political uncertainty in the UK mounted after the Brexit talks between the government and the labour opposition collapsed. UK PM May said she will put a deal with an improved package of measures to Parliament, but it is unlikely it will be approved. The focus now turns to the contest on the leadership for the conservative party. The EU parliamentary election might show big support for hard-line Brexiteers. We assume this context to remain negative for sterling, even as the currency takes a breather this morning. EUR/GBP 0.8840 is nest resistance on the technical chart.

EUR/USD: dollar outperformance euro as decline in US yields halts, for now

Since its deep fall towards a two-week low in early May, EURUSD slipped beneath the 20- and 40-simple moving averages (SMAs) in the daily timeframe, remaining in a descending channel of its drop from 1.1570. The technical picture supports that the 1.1260 resistance is likely to continue to hold in the short-term.

Looking at momentum indicators, the MACD declined below its trigger line and zero line, suggesting that the market could keep losing momentum in the near term. The stochastic also supports this view in the oversold territory.

If prices continue to head lower, support should come from the 23-month low of 1.1110. A drop below this level would reinforce the medium-term bearish view and open the way towards the return line of the downward sloping channel around the 1.1000 handle, before resting the 1.0900 support, registered on March 2017.

However, should an upside reversal take form, immediate resistance would likely come from the 20- and 40-SMAs currently at 1.1190 and 1.1220 correspondingly. Even higher, the 1.1260 resistance and the 23.6% Fibonacci retracement level of the downleg from 1.1815 to 1.1110 near 1.1275 could attract traders’ attention.

In brief, EURUSD is heading sharply lower over the last five days in the descending channel, suggesting more losses in the short-term.

Market movers today

We start the week in a quiet fashion on the data front and even the US-China trade war might be entering a quiet phase after the recent round of escalation. The next thing to look for is any news on more Chinese stimulus and more specific information regarding when the next round of talks in Beijing will take place. While things may have calmed down for now, we still see a risk of another flare-up later as the two sides seem far from each other on the last critical bits of the deal. More financial stress is needed, in our view, to get enough pressure to reach a deal.

Later this week, markets will keep an eye on the PMI readings out on both sides of the Atlantic to gauge what is next for the global economy after the new trade spat. In the UK, the EU elections, which start on Thursday, could inflict a heavy defeat on the Conservative Party and increase pressure on Prime Minister Theresa May to resign.

Selected market news

Asian stocks are up this morning, helped by election wins for incumbents in India and Australia and better-than-expected Japanese GDP figures. Defying gloomy survey readings that had pointed to a slowdown, the Japanese economy expanded by an annualised 2.1% in Q1. However the details suggest that consumer demand has remained soft and in light of slowing demand from China and ASEAN countries due to the trade war, we remain cautious on the outlook for Japan.

Elsewhere, politics continues to dominate the news flow. After cross-party talks with Labour collapsed last week, the GBP hit its weakest level since February. Over the weekend, embattled PM Theresa May promised to make a "bold offer" and set out a "new and improved" Brexit deal as she tries to pass her EU withdrawal treaty at the fourth attempt in early June. Although the new offer is said to include improvements on workers' rights, Labour leader Jeremy Corbyn is widely quoted as being sceptical of any deal passing and hence a June agreement is already facing headwinds. On previous occasions the GBP would rally mildly on the news of a change in the impasse and this could very well happen again in the coming week. However, overall, we remain sceptical, as we see only a slim likelihood of the bill passing, after pressure on politicians to find a way forward has eased following the Brexit deadline extension.

Austria is heading for new elections after vice-chancellor Strache from the far-right FPÖ party resigned over a corruption scandal on Saturday, plunging the country into a government crisis just days ahead of the European elections.

Amid rising tensions in the Middle East - not least due to more sabre-rattling between the US and Iran - and signs from OPEC producers of continuing output cuts, oil prices surged past USD73/bbl.

General Trend:

• Little fresh China/US trade news seen over the weekend
• Australian equities continue to trade at 2007 highs amid tax cut speculation, ruling center right coalition unexpectedly won 3rd term
• Aussie banks outperform as less regulatory headwinds seen post elections; Healthcare and property shares also gain in Australia
• In early trade, Chinese equities extend losses seen on Friday’s session
• CNBC from Friday: China-US trade talks reportedly have stalled; scheduling for next round of negotiations is said to be in flux
• Shanghai property index declines, officials said to have warned on property prices in various cities
• Chinese chip makers gain amid focus on US supplier ban related to Huawei
• PBOC issued quarterly monetary policy report on Friday: Trade friction brings uncertainties, impacts supply chain
• Oil prices gain after OPEC members’ comments
• Australian dollar and bond yields rise following election results
• Australia election results give RBA more room to cut rates in near term (analyst)
• Key RBA events seen for Tuesday: The RBA is due to release the minutes for its May policy meeting.
• RBA Gov Lowe is also due to speak on May 21st at the Economic Society of Australia Business Lunch
• Japan Q1 prelim GDP unexpectedly expanded: Capex and consumption not as bad as feared, imports see largest drop since 2009
• Japan affirms plan to raise sales tax after better GDP data
• South Korea Finance Ministry steps up warnings related to the FX market
• South Korea Finance Min said certain central banks purchased domestic bonds last week; No comment if USD/KRW will break 1,200
• South Korea sold less than planned amount in 10-year bond auction
• Indian Rupee (INR) supported by election exit polls
• US and Japan expected to hold trade talks later this week (May 24th)
• US tech companies react to recent Trump move on Huawei

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened +0.3%
• (AU) Australia Election Results: PM Morrison and center right coalition retain power (not expected); Labor Party leader Bill Shorten is expected to step down after the loss, and his deputy Tanya Plibersek is likely to take over party leadership

Japan

• Nikkei 225 opened +0.3%
• (JP) JAPAN Q1 PRELIMINARY GDP Q/Q: 0.5% V -0.1%E ANNUALIZED GDP Q/Q: 2.1% V -0.2%E; Japan Q1 imports fall 4.6% q/q (biggest fall since Q1 2009); Q1 net exports adds 0.4 ppts to Q/Q GDP
• (JP) Japan Economy Min Motegi: No change to view government will raise sales tax to 10% in Oct - Comments after Q1 prelim GDP data
• (JP) Japan Mar Final Industrial Production M/M: -0.6% v -0.9% prelim; Y/Y: -4.3% v -4.6% prelim
• (JP) Japan Cabinet Sec Suga: GDP has no impact on tax hike
• 6758.JP PlayStation team said to have been unaware of Microsoft deal ahead of time - US press

Korea

• Kospi opened +0.5%
• (KR) According to Korea Economic Research Institute; sees potential growth rate for South Korea at 2.5% through 2022 (prior 2.7%)
• (KR) South Korea Fin Min Hong: No comment if USD/KRW will break 01,200; Reiterates ready to respond to any herd behavior in FX market
• (KR) Bank of Korea (BOK) sells 6-month Monetary Stabilization Bonds (MSB), avg yield 1.65% v 1.73% prior
• (KR) South Korea sells KRW850B v KRW1.0T indicated in 10-yr Bonds; avg yield 1.83% v 1.99% prior

China/Hong Kong

• Hang Seng opened +0.1%; Shanghai Composite opened -0.3%
• (CN) China PBoC: To keep balance in prudent monetary policy, Reiterates to keep appropriate liquidity and market rates - Quarterly Monetary Policy Implementation report (Friday)
• (CN) China PBOC Vice Gov Pan Gongsheng reiterates China has confidence in keeping yuan exchange rate largely steady, will adopt necessary counter-cyclical measures
• (CN) Former PBOC official Sheng reiterates China should avoid yuan weakening past 7.00 level vs the US dollar (in line with press article from May 17th)
• US Commerce Dept spokesperson: US may soon scale back the trade restrictions placed on Huawei
• (CN) China PBoC Open Market Operation (OMO): Skips for 7th consecutive session: Net: CNY0B v CNY0B prior
• (CN) China PBoC sets yuan reference rate: 6.8988 v 6.8859 prior (weakest setting since late Dec 2018)
• (CN) China National Development and Reform Commission (NDRC): To annually revises negative list for market access each year - Xinhua
• (CN) China Politburo Standing Committee member Wang Yang: US China trade war could cut 1% of GDP in 2019 worst case scenario - SCMP
• (US) US Embassy Spokesperson: US Ambassador to china Branstad to visit Tibet and Qinghai this week (1st visit to Tibet since 2013)

Other Asia

• (IN) India Election Update: According to exit polls show PM Modi leading

North America

• (IR) US President Trump: If Iran wants to fight, that will be the official end of Iran. Never threaten the United States again! – tweet; Tweet in response to reports that a rocket was fired into Baghdad’s Green Zone less than a mile away from the US Embassy.
• (US) US President Trump on Prerecorded Fox News Interview: Companies are moving out of China to other countries in Asia; Would like to deal with carried interest tax
• (US) President Trump Tweets: "Starting Monday, our great Farmers can begin doing business again with Mexico and Canada. They have both taken the tariff penalties off of your great agricultural product.Please be sure that you are treated fairly. Any complaints should immediately go to @SecretarySonny Perdue!

Europe

• (SA) Saudi Energy Minister al-Falih said there was consensus among OPEC and allied oil producers to lower crude inventories 'gently, possible rollover in H2 2019 of previously agreed output curbs was discussed at Sunday's ministerial panel - financial press
• (RU) Russia Energy Min Novak said the easing of production cuts had been discussed, supply situation would be clearer in a month – financial press
• (CH) Switzerland votes in favor to bring gun laws in line with EU standards (stricter) 63% in favor, 33% against or would have lost the ability to travel to EU without visa
• TCG.UK Have held discussions with a several suppliers to reassure them there is "ample resources" to make it through the summer holiday season
• (UK) Labour Brexit spokesperson Starmer: govt must include provision for a public vote in the Brexit withdrawal agreement bill in order to break the impasse with Labour – BBC
• (KW) Kuwait Oil Min: OPEC+ countries' compliance with oil cuts is very big; Kuwait committed to less oil output
• (DE) Germany Finance Min April Monthly Report: Apr Tax Rev +2.6% y/y; YTD Tax Rev +2% y/y
• (EU) ECB Knot (Netherlands): Euro zone inflation is not where ECB wants it yet, we should keep going
• (UK) PM May said to have offered a "bold" Brexit deal, though parties remain skeptic

Levels as of 01:20ET

• Hang Seng -0.5%; Shanghai Composite -0.8%; Kospi +0.3%; Nikkei225 +0.4%; ASX 200 +1.7%
• Equity Futures: S&P500 +0.3%; Nasdaq100 +0.4%, Dax +0.3%; FTSE100 +0.2%
• EUR 1.1152-1.1168; JPY 110.00-110.31; AUD 0.6890-0.6923; NZD 0.6521-0.6542
• Commodity Futures: Gold +0.0% at $1,275/oz; Crude Oil +1.3% at $63.73/brl; Copper +0.1% at $2.74/lb

For the 24 hours to 23:00 GMT, the EUR declined 0.12% against the USD and closed at 1.1161 on Friday, ahead of the upcoming European parliamentary elections next week.

On the data front, the Euro-zone's final consumer price index (CPI) advanced 1.7% on an annual basis in April, meeting market expectations and confirming the preliminary print. In the prior month, the CPI had recorded a rise of 1.4%. Moreover, the nation's seasonally adjusted construction output declined 0.3% on a monthly basis in March, amid slowdown in building activities and following a gain of 3.0% in the preceding month.

In the US, data indicated that the flash Reuters/Michigan consumer sentiment index climbed to 102.4 in May, notching its highest level in 15 years and beating market expectations for a rise to a level of 97.5. In the previous month, the index had recorded a reading of 97.2.

In the Asian session, at GMT0300, the pair is trading at 1.1157, with the EUR trading slightly lower against the USD from Friday's close.

The pair is expected to find support at 1.1147, and a fall through could take it to the next support level of 1.1136. The pair is expected to find its first resistance at 1.1176, and a rise through could take it to the next resistance level of 1.1194.

Moving ahead, traders would keep an eye on Germany's producer price index for April, set to release in a few hours. Later in the day, the US Chicago Fed national activity index for April, will garner significant amount of investors' attention.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the GBP declined 0.58% against the USD and closed at 1.2722 on Friday, after Brexit negotiations between the Conservatives and Labour collapsed.

Data revealed that UK's Rightmove house price index rebounded 0.1% on a yearly basis in May, following a decline of 0.1% in the previous month.

In the Asian session, at GMT0300, the pair is trading at 1.2735, with the GBP trading 0.10% higher against the USD from Friday's close.

The pair is expected to find support at 1.2702, and a fall through could take it to the next support level of 1.2668. The pair is expected to find its first resistance at 1.2782, and a rise through could take it to the next resistance level of 1.2828.

Amid lack of macroeconomic releases in UK today, investors would focus on global macroeconomic releases for further cues.

The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the USD rose 0.17% against the JPY and closed at 110.04 on Friday.

In the Asian session, at GMT0300, the pair is trading at 110.23, with the USD trading 0.17% higher against the JPY from Friday's close.

Overnight data showed that Japan's flash annualised gross domestic product (GDP) unexpectedly climbed 2.1% on a quarterly basis in 1Q 2019, defying market consensus for a fall of 0.2%. In the preceding month, the GDP had registered a revised gain of 1.6%. Meanwhile, the nation's final industrial production dropped 4.3% on an annual basis in March. In the prior month, industrial production had recorded a fall of 1.1%, while preliminary figures had indicated a decline of 4.6%.

The pair is expected to find support at 109.71, and a fall through could take it to the next support level of 109.2. The pair is expected to find its first resistance at 110.53, and a rise through could take it to the next resistance level of 110.84.

Going ahead, traders would await Japan's housing loans for the first quarter, scheduled to release overnight.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.