USD/JPY stays underpinned, inches towards the 111 handle once again

USD/JPY stays underpinned, inches towards the 111 handle once again

Technical Analysis

Author: Justin Low | usdjpy

USD/JPY trades at the highs around 110.90

USD/JPY H1 22-02
ForexLive The pair is inching upwards as risk sentiment is holding up well so far on the day. European equities started flat but are now trading mildly higher and that sentiment is shared by US equity futures as well:
E-minis 22-02
Markets are still holding on to optimism from US-China trade talks and that is leading to the mild gains seen in USD/JPY thus far. That said, the 111.00 handle is still proving to be elusive even as buyers are still maintaining the near-term bullish bias in the pair.
Price has tested support from the key hourly moving averages since trading yesterday and buyers have shown their commitment to defend that bias by holding on to support levels there. But for an extension higher, there needs to be a positive breakthrough in US-China trade talks.
I reckon any breaking headlines on a memorandum of understanding being struck would see risk assets jump alongside USD/JPY. But the devil will be in the details. If the accord that is agreed upon doesn't cover major structural issues, expect optimism to be tempered with as this means those issues will still continue to creep up further down the road.

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