Yesterday the global markets did not receive any shocking new revelation from the White House, but there were signals from China and the US about the willingness to negotiate, so the main discussion in the markets over the last 24 hours began to revolve around the topic, whether the markets not overreacted a little? This seems to be an important question but, the risk of a total commercial trade war is low and its valuable impact on the international trade in goods and services will be small. But the risk remains in the short term whether the topic will not become the main generator of emotions again and will intensify the reception of weaker data readings and economic activity. This week we have the end of the month/quarter and the Easter break, so the temptation to cut the position is high among the global investors. This reaction works against USD in relation to NOK, EUR and NZD, but USD/JPY is higher along with the rebound in the stock markets. It still might not be the end of the unrest related to the risk of a trade war, although (as seen yesterday), this is not an issue that will keep the markets in check.
Let's now take a look at the USD/JPY technical picture at the H1 time frame. The market has managed to break out of the potential triangle pattern, made a new local low at the level of 104.65 and retraced about 50% of the last leg down. the nearest target for the bulls is seen at the level of 61% at 105.90 , but the market is trading in overbought conditions already. The nearest technical support is seen at the level of 105.25.
