The failing US-China trade deal switch on the risk-off mood again on Thursday Asians session. JPY rose 0.60% against the JPY fell to 109.45 besides US 10-year treasury yields too down to 3.01%.
US PMI data outperforms Japan and the FOMC minutes confirmed the June rate hike but lack surprises.

Data review:

  • Japan Manufacturing PMI declines in May to 52.5, from 53.8 in April
  • Flash U.S. Manufacturing PMI nudged higher to 56.6 (56.5 in April), 44-month high
  • Flash U.S. Services Business Activity Index touched higher to 55.7 (54.6 in April),3-month high

Data preview:
In the US, weekly unemployment claims and existing home sales are due.

FX comment: 

The break of 110.60 confirmed the near-term top formation, ensuring corrective phase entered to serious selling. After the quick break of the 2-month ascending trendline, the price has furthermore broken its 50-day moving average which paves the way towards 109.40. This suggests that the downtrend is set to reassert itself as the daily RSI study unwinds a series of bearish divergence that formed between 110.00-111.39 levels. The shift in sentiment indicates that rallies to resistance at 110.00 and 110.80 should attract selling interest with support against the May 04 low at 108.65. Below here the focus will move down to 108.00 its 50MA.
Before NFP, we had forecasted USDJPY sell trade currently sits at 1.50% profit. We suggest taking profit at the current market price.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

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