US considers higher tariffs for Chinese products

The US administration seems to be considering to increase planned tariffs from 10% to 25%, for $200 B worth of Chinese imports. The move adds further pressure to China as it would face increased tariffs on about half of its exports in the US. While China has not responded initially, reports state that representatives of the US and China have been speaking privately to restart negotiations. Analysts currently, consider the move as another negotiating tactic on behalf of the US. Should there be further escalation of the US-Sino trade dispute we could see the USD strengthening in the short term while commodity currencies may be hit.

USD/JPY rose yesterday breaking the 111.30 resistance line aiming for the 112.05 resistance line. In regards to yesterday’s analysis the pair has broken the 111.30 resistance line and we lift our sideways bias in favor of a more bullish outlook. Hence, we could see the pair trading in a more bullish market today if the FOMC meeting favors the USD side. Please note that the RSI indicator has almost reached the reading of 70, implying a bullish momentum however with room for further advancements available. Should the pair find fresh buying orders along its path, we could see it breaking the 112.05 resistance line while aiming if not breaking the 112.50 resistance barrier. Should it come under selling interest we could see the pair dropping and breaking the 111.30 support line.