JPY – Risk aversion resurfaces, yen remains strong

U.S. President Donald Trump raised concerns about slowing economic growth by saying he might impose tariffs on smartphone giant Apple and imports from the entire European Union. Trump has threatened to impose a 25% tariff on iPhones sold by Apple in the United States but not made in the country, and he has also suggested imposing a 50% tariff on EU goods starting June 1. Investors sold the dollar amid concerns about a further escalation in the trade war. The dollar fell to 142.50 yen on Friday, compared with 144 yen at the close of the previous day.

As can be seen from the technical chart, the MACD indicator has just broken below the signal line, and the exchange rate has also fallen below the 25-day moving average. An important basis at present is the 142 level. If it breaks below this area again, it is expected that the US dollar against the yen may usher in a more violent decline; the subsequent support will refer to the 140 mark and the low of 139.56 in September last year, and further point to the 138 level. The nearest resistance is estimated at the 25-day moving average of 144.20 and 145, and the next level is 145.50 and 146.10.

Estimated range:
Resistance 144.20 – 145.00 – 145.50 – 146.10
Support 142.00 - 140.00 – 139.56 – 138.00

Focus:
Friday: Japan's unemployment rate in April (07:30)
Japan April Retail Sales (07：50)

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