Despite the number of economic events discussed in FX Leaders May 17 – Economic Event Outlook, the market is all about technical analysis. The ongoing geopolitical tensions and trade war fears between the U.S. and China are keeping the market on toes. In fact, the United States and China are expected to launch trade talks today in a bid to avoid a damaging tariff war.

The market is anxiously waiting for the outcome. In the meantime, the safe haven currency Japanese yen is trading sideways. The EUR/JPY and GBP/JPY are tossing in profit and loss as investors seem uncertain about the meeting outcome. During the U.S. session, the Japanese crosses can get volatile as the U.S. and China will embark on the second round of trade talks in Washington.

They are supposed to address the ”trade growth” as both sides have warned reciprocal tariffs on hundreds of billions of dollars worth of imports. I hope both of the economics come to a mutual agreement, as if they fail again, the level of uncertainty will hike and ultimately hit the global stocks and safe haven investments. We can expect strength in gold and Japanese yen. Let’s look at the key support and resistance for EUR/JPY and GBP/JPY.

EUR/JPY – Major Trading Levels

Support     Resistance

129.77    130.57

129.53    130.81

129.13    131.21

Key Trading Level:    130.17

GBP/JPY – Major Trading Levels

Support     Resistance

148.57    149.59

148.25    149.91

147.74    150.42

Key Trading Level:    149.08