There is nervousness on the financial markets fueled by fears of trade wars recalled on Friday by Trump's admiration for China. Panic is not visible, but the stock market is red. The currency market remains stable without major movements: EUR / USD keeps on close to 1.16. The yen remains stable despite the earthquake that hit the western part of Japan, including Osaka, the second largest urban area in the country. Changes from the beginning of the week on major pairs with USD do not exceed 0.25%. The crude market is warming up before the OPEC summit.
On Monday, 18th of June, the event calendar is light in important data releases, so an exceptionally quiet start to the week is going on. In addition to the data on the Japanese trade balance, no macro data will be published. It is only on Thursday that the most important event of the week will take place - the Bank of England meeting and its decision on interest rates. Today, we are mainly waiting for speeches of central bankers as a meeting on central banks held by the ECB will take place from Monday to Wednesday in Sintra. The event will be opened by the President of the European Central Bank. Mario Draghi will also be speaking on Tuesday and Wednesday. The movements of the single currency in the coming days may depend on its rhetoric. In addition, there will be numerous presentations of FED members at the FOMC today. Dudley will be the first to speak at 12:45 pm GMP, then Duke, Bostic and Williams in the space of hours.
USD/JPY analysis for 18/06/2018:
Stock markets in Asia started a week with a decline after raising concerns about a trade dispute between the US and China. Nikkei opened with a small gap, which deepened over time. When the lunch break starts, the index loses 0.89% or over 200 points. The situation is similar to the Korean Kospi. The index currently loses nearly 1.0% and is at the session minimum.
There were moderate data releases overnight on Japan's trade balance. In May, the deficit amounted to JPY 578 billion, although only 235 billion JPY was expected. Exports grew stronger than expected (+ 8.1% vs. 7.5%), however strong appreciation of imports increased the balance of trade.
Let's now take a look at the USD/JPY technical picture at the H4 time frame. The market has bounced from the support at the level of 110.27 and currently is moving towards the golden trend line resistance located around the level of 110.65. In a case of a bullish breakout, just above this line, there is a technical resistance at the level of 110.72 and another one at the level of 110.89. The key level to the upside is still located at 111.39. On the other hand, the immediate support is 110.27 and then 109.91 - 109.83 zone. The momentum remains above its fifty level, so there is still a change for a move upwards.