USD/JPY has cleared the 109.20 final Fibo hurdle ahead of November's 109.49 peak with help from US GDP, durable goods and jobless claims beats that are lifting Treasury yields and the USD more broadly nL1N2870GS.
The data support the market narrative that the U.S. economy is holding up reasonably well despite existing trade war fallout.
The same cannot be said of the latest Chinese data that has China's Finance Ministry and the PBOC scrambling for the least risky ways to prop up growth nL1N2870DK.
U.S. and China have repeatedly said that a phase one trade deal is close to done, though the scope of tariff de-escalation appears to be a sticking point.
Markets have priced in that Dec.
15 tariff hikes won't happen and a phase one deal will eventually be reached, even if not before year-end.
With USD/JPY 1-month vols retesting record lows today, the VIX very subdued and S&Ps making fresh record highs again, a breakout above November's 109.49 highs, and expected buy stops beyond, looks promising.
The 110 level will surely attract sales from specs and Japanese exporters, but the key technical targets are by 110.50 where the 76.4% Fibo of 2019's drop and an ABC measured objective off August's low converge.
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