According to media, after the US decision to impose tariffs on steel and aluminium, EU, Mexico and Canada decided to retaliate. The US decision to deny exemptions and proceed with the tariffs was cited as necessary to protect US domestic industry and national security. Considering that China is in a similar status, we could be seeing the ignition of a global trade war for the US. Should there be further escalation on the situation we could see safe havens strengthen.
USD/JPY after trading in a sideways manner yesterday, rose during the Asian morning today, breaking the 108.95 resistance line, now turned to support. We could be seeing the pair moving in a sideways movement, however it could be the case for USD/JPY to be sensitive to any fundamental news regarding
trade wars as well as the release of the US employment report. Should the bulls take over, the pair could aim for the 109.75 resistance level. Should the bears take the reins, we could see the pair breaking the 108.95 support line and aim for the 108.50 support barrier.