USD/JPY capped near 113.80; US-Japan alliance based on 'trust'

Currently, USD/JPY is trading at 113.27, slightly up +0.05% or 5-pips on the day, having posted a daily high at 113.85 and low at 113.04.

The American dollar vs. Japanese yen has been stopped near 113.80 handle as market participants shifted from overnight confidence to 'wait-see' mode due to the summit press conference President Trump and Japan's PM Abe are expected to hold today around 18:00 GMT.

Trump had accused Japan on the wires of stealing American jobs, however, the same rhetoric is used against China. On the other hand, Abe landed optimistic and willing to build a stronger US-Japan alliance that the world can look up to as an example of prosperity and trust. As of writing, the USD/JPY currency pair traded 50-pips off today's high. 

Historical data available for traders and investors indicates during the last 6-weeks that USD/JPY pair had the best trading day at +1.76% (Jan.18) or 201-pips, and the worst at -1.65% (Jan.05) or (190)-pips.

Technical levels to consider

In terms of technical levels, upside barriers are aligned at 113.94 (high Feb.1), then at 114.98 (50-DMA) and above that at 116.85 (high Jan.11). While supports are aligned at 111.58 (low Feb.7), later at 110.06 (100-DMA) and below that at 107.20 (200-DMA). On the other hand, Stochastic Oscillator (5,3,3) seems to head north but slightly deviates from the bullish continuation. Therefore, there is evidence to expect further US dollars gains in the near term, however, a break below 113.00 would be enough to cast a flash sell-off. 

Trump pulling back from the trade war expectation he built himself