USD/JPY: correction in Tokyo, 50-hr SMA/rising support compromised

USD/JPY has started out in the Tokyo open offered and down towards a test of the 107 handle. Currently, USD/JPY is trading at 107.08, down -0.11% on the day, having posted a daily high at 107.27 and low at 107.05.

Wall Street bulls take the lead as China is pushing free trade

The move comes on the back of yen strength as Syrian headlines flow from the French President putting fighter jets on alert if needed for air strikes on Syria along with reports of heavy coalition air traffic near the Iraq / Syria border and the latest from Fox saying 'imminent announcement' on US action in Syria.

Meanwhile, the pair had been sent higher on more positive geopolitical news as stocks cheered a speech by Chinese President Xi Jinping stating that China should “push for free trade” and that “China will not threaten others ...", and, "... will not undermine existing global order,” and adding that China should, “sharply widen access to market”.

However, as Trump starts to make amends with one world leader, (“We will make great progress together!” - Tump), he takes on another two with Russia recently warning the US to stay out of Syria. 

FOMC minutes: looking for robust discussions on trade - Nomura

Russian UN Ambassador, Vassily Nebenzia, told US Ambassador Nikki Haley, “the threats you are proffering that you're stating vis-a-vis Syria should make us seriously worried, all of us, because we could find ourselves on the threshold of some very sad and serious events. I would once again ask you, once again beseech you, to refrain from the plans that you're currently developing for Syria.” Both Syria and Russia deny the chemical attack took place.

USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet explained that the pair has been consolidating since late last week confined to a 100 pips' range between 106.60 and 107.50, and one of those levels needs to give up for some directional strength.

"In the  4 hours chart, the pair keeps holding above its 100 and 200 SMA, with the shortest slowly advancing below the larger one, but both still lacking certain directional strength. Technical indicators in the mentioned chart hover around their mid-lines, offering a neutral stance. The bullish case keeps building up, although a break beyond 107.90 is required before a more sustainable recovery is possible," Valeria explained.