The USD/JPY was in the action on Tuesday trade for all number of reasons. Early on there was another threat from North Korea that sent the Yen jumping. That was followed up by a surge in the USD lead by the prospect of US President Trump’s tax cuts moving closer to reality.
The Yen bounced up towards the 111.50 level that I spoke about yesterday. I still like the current levels, from 111.50-70 as a potential point to be a seller. Although slightly above that we have the 50-SMA to act as resistance. Should we get some more strength in the USD then we will very likely take out 112.00.
I feel that we are still bearish below 112.00. If we drive any higher than that we are back within the previous range and I think that there is every chance, at that point, that we make another leg higher.
The Trump tax cuts are crucial for the USD and will be the driving force in markets in the coming months.
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