USD/JPY Ticks Higher

USD/JPY ticks higher as investors welcome Trumpcare

USD/JPY is enjoying moderate gains this Friday morning in Asia after the US House of Representatives approved a bill on Thursday to repeal major parts of Obamacare and replace it with a Republican health care plan (Trumpcare plan).

The Dollar-Yen pair responded to the positive news by moving higher to 112.63. The moderate gains in the USD/JPY pair are pretty much in line with the uptick in the treasury yields. The 10-yr yield is up 4.3 basis points at 2.352%, while the 2-yr yield is up 1.2 basis points at 1.31%.

Premature cheering

In Senate, there is pessimism over ObamaCare repeal. A senior GOP senator said the chances of getting 51 votes for legislation based on the House healthcare bill are less than 1 in 5. It is also being said that the portions of the legislation would have to be removed.

Nevertheless, getting the bill passed is  Trump’s biggest legislative victory so far and is likely to calm investors who were worried about Trump’s ability to get things done. Now that the health care bill is passed, investors expect Trump to deliver on the fiscal front as quickly as possible. However, too much optimism is uncalled for as it is widely believed that Trump’s tax plan is built no a fairy tale and what we are likely to get is a watered down version of original copy.

USD/JPY Technical Levels

A break above 113.00 (zero figure + falling trend line hurdle) would 113.61 (Mar 8 low) and 114.00 (zero levels). On the other hand, a breakdown of support at 112.33 (5-DMA) could yield a pullback to 111.69 (50-DMA) and 111.60 (Feb low).

15M Bullish Overbought Low
1H Bearish Neutral High
4H Bullish Neutral High
1D Bearish Overbought Expanding
1W Bullish Neutral Low