USD/JPY inches lower on possible US military action on Syria
The USD/JPY pair came under renewed selling pressure in the last hour as the safe-haven JPY found demand amid weakening risk appetite. The pair lost about 20 pips in a quick succession and is now at 110.78, still up 0.08% on the day.
A recent report by Reuters suggested that the Pentagon is in detailed discussions with the White House about a potential military action on Syria in response to this week's chemical attack, and U.S. Defense Secretary Mattis will discuss this matter with President Trump. Major equity indices in the U.S. also edged lower following the news, projecting the shift in the market mood.
However, the US Dollar Index continues to show a good resilience despite the weak performance of the 10-year T-Bond yields. The DXY remains near weekly highs around 100.60, making it difficult for the pair to drop further. In the meantime, the Trump and Xi summit just got under way as the Chinese President arrived in Florida. There is no scheduled press conference after today's meeting, and the pair could struggle to make a decisive move ahead of tomorrow's NFP data.
- US NFP: We expect 191K in March - Wells Fargo
- China President Xi Jinping’s first face-to-face meeting with US President Donald Trump - UOB
Technical levels to watch
The initial hurdle to the upside for the pair aligns at 111 (psychological level) ahead of 111.45 (Apr. 5 high) and 112.20 (Mar. 31 high). To the downside, supports could be found at 110.10 (Mar. 27 low), 109.80 (Nov. 18 low) and 109 (psychological level).
