USD/JPY turns positive on the day above 109 on Trump's comments
- Trump says USD is going to get 'stronger and stronger'
- DXY finally gains traction and jumps above 89.
- USD/JPY makes a meaningful recovery to retake the 109 mark.
The USD/JPY pair made a sharp u-turn in the late NA session and rose nearly 100 pips in a matter of minutes to erase all of its daily losses. As of writing, the pair was trading at 109.50, where it was up 0.25% on the day.
In an exclusive interview with CNBC, U.S. President Donald Trump said that the dollar was going to get stronger and stronger and ultimately he would want to see a strong dollar. Commenting on Treasury Secretary Steven Mnuchin's remarks, Trump argued that they were taken out of context. After suffering heavy losses since the start of the week and plummeting to its worst level in more than three years at 88.27, the US Dollar Index found the much-needed fuel in Trump's comments and retraced its daily drop. As of writing, the DXY was at 89.30, where it was up 0.35% on the day.
There won't be any macroeconomic data releases from Japan and investors will be focused on the GDP data from the United States. A positive reading could continue to attract the investors to the USD, which is still technically oversold against its major rivals.
Technical outlook
The pair could encounter the first technical support at 109 (psychological level) ahead of 108.50 (Sep. 5 low/daily low) and 108.30 (Sep. 8 low). On the upside, resistances align at 110.30 (Jan. 24 high), 111.15 (Jan. 23 high) and 111.75 (200-DMA).