After holidays in the USA and the UK volatility in the Asian session remained severely limited. The exception is USD/JPY, which again descended under 109.00 and again defended the support zone 108.50-70. EUR/USD remains close to the long-term hole and support around 1.1620. GBP/USD is struggling to hold at 1.33. US 10Y yields are falling at 2.90%. WTI prices are going in the direction of $67. An ounce of gold is valued at less than 1,300 USD.
On Tuesday 29th of May, the event calendar is light with important data releases, but market participants should keep an eye on M3 Money Supply data from the Eurozone, Consumer Confidence data from the US and the RBNZ Financial Stability Report.
USD/JPY analysis for 29/05/2018:
Economic data releases published in Japan overnight matched expectations. The Japanese unemployment rate was unchanged at 2.5% and the Corporate Service Price Index data beat the expectations of 0.5% with the actual reading of 0.9%. The upcoming summit between the US and North Korea still looks to be on the cards. In addition, Japan's Prime Minister Abe is set to meet US President Trump before the summit to discuss North Korea developments. Both these factors should be watched by the global investors as both of them will have an impact on the USD or JPY price behavior.
Let's now take a look at the USD/JPY technical picture at the H4 time frame. The price had made a swing high at the level of 111.39, felt out of the channel and currently is testing the technical support at the level of 108.81. The whole zone between 108.81 - 108.27 will be acting as a strong technical support for the price, so any break below will indicate that the bears are now in full control of the market. The nearest technical resistance is seen at the level of 109.20.
