USD/JPY: US DOLLAR HAD A “GREAT FALL"....WILL THE "NFP" COME TO RESCUE....???

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The pair fell more than 1.3% on yesterday, the biggest single-day drop in more than two years. The safe heaven demand rose very drastically as President Trump freed  the Sino-US trade daemon again with more tariffs, triggering a flight to safety,  an escalating trade tensions could put more and more pressure on the US Federal Reserve  to move towards more interest rate cuts in the near future. In a big surprise to all US President announced a new round of tariffs on Chinese imports, to become effective on September 1. With that US Treasury yields collapsed to fresh low of 1.95%.In the midst of all,  the minutes of Bank of Japan’s July meeting were also  released, the meeting showed consensus among members that persistent easing is appropriate, and necessary to achieve the 2% price objective. But that did not had a minor of affect as the overall sentiments are risk-off. The pair is trading close to its fresh low around 107.00 region and a break below this will likely keep the slump going. In the 4 hours chart, the pair broke below all of its moving averages, while technical indicators are point towards the lower side, entering oversold territory. Daily basis, the technical picture is also bearish with the pair collapsing below the 20 DMA. Going ahead all the eyes will be on the NFP job data for any sustained correction but that seems very far now, until US-China can come to concrete solution on trade war front.

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