- Escalating tension between the U.S. and China
- USD/JPY 107 handle breached
- Triple bottom spotted
USD/JPY took a nosedive yesterday, breaking below the key level of 107 due to the weakness of USD caused by the deteriorating political tension between the U.S. and China after the U.S. Justice Department indicted two Chinese nationals of espionage, accusing them of stealing data of weapons designs, drug information, software source code and personal data.
The Japanese manufacturing sector showed slight improvement as contraction slows down in July after lockdown measures have been eased.
At the moment, we are seeing the formation of a triple bottom for USD/JPY on the H4 chart. It will be a herculean task for this pattern formation to play out amid the political tension between the U.S. and China. Moreover, USD/JPY will soon be faced by the challenge of breaking above the key level of 107 before standing a chance to recoup its recent losses.