FX Markets are a bit boring today with not much action prevailing in the market. It looks like every other trader is saving it’s shot to trade the G20 Summit’s outcome on Monday, and I think it totally makes sense. We never know whether Trump & Xi are going to achieve a trade deal or not, and in both cases, the market is going to react with extreme aggression. In fact, we may have considerable gaps in the market on Monday. So it’s better to be safe than sorry, and that’s something keeping traders out of the market today.
Expectations from G20 Summit
In G20 meeting, China is likely to insist the U.S. remove its existing tariffs on Chinese goods and, also, remove its ban, which is still existing on Huwai technology. But in case the U.S. fails to comply with Chinese demands, the risk sentiment will be off, and we may see further demand for safe-haven assets such as Gold, Silver and Japanese yen.
The G20 summit grants an opportunity for the Trump government to deliver notable growth in its foreign-policy pursuances while a resolution to the trade conflict with China is possibly the top preference.
Moreover, working on relationships with Russia should not linger very behind. Both Putin and Xi have shown a propensity to improve their connection with the United States. The hurdle will be for the Trump presidency to produce a policy that is friendly to China and Russia while not diminishing American authority in the world.
USD/JPY - Technical Analysis
Anyhow, coming back to the USD/JPY technical outlook. Looking at the USD/JPY pair, it’s mostly stable at 107.75, for just a while the pair touched the resistance level of 108.00 but quickly moving back at the initial position. Moreover, the pair USD/JPY is currently trading at 107.70, consolidating in a short range of 107.65 to 107.85.
Daily Support and Resistance
S3 106.9
S2 107.39
S1 107.59
Pivot Point 107.88
R1 108.08
R2 108.37
R3 108.86
Consider trading sideways by sell at the top around 108.00 resistance, and buying at the bottom around 107.500 until the price action occors. On both sides, placing a 30 pips stop loss will be a good idea. All the best!
