USD/JPY is threatening to break out above resistance near 109 after hopeful comments from U.S.
President Trump aboutPhase 1 of a U.S.-China trade deal nL2N27D0BT and the EU's Brexit extension nL8N27D21P. That is occurring even before major event risks -- the FOMC on Wednesday, BOJ Thursday and U.S. jobs, ISM and GDP reports on Friday.
USD/JPY was already rising before the Trump headlines on optimism the U.S. and China are at least beginning to de-escalate protectionist measures, reducing some uncertainty that's weighed on global trade and economic growth. Trade and economic worries had forced the Fed to ease and boosted the haven yen, which pushed USD/JPY lower until it bottomed in the 104.00s for the third time in two years in August. Also helping USD/JPY, Japanese investors see fewalternatives to stocks and higher yielding assets abroad while awaiting U.S-China trade agreements.
S&Ps are making new record highs today on brighter trade deal hopes nL2N27A0TO, so risk and rates-driven USD/JPY may make a run at Aug.
1's spike high and 61.8% of 2019 drop at 109.32/36 before this week's key event risks.
That would put those events in a position to affirm or undermine the breakout.