Trend line at 106.75
The USDJPY has moved lower with the stocks decline, as Friday afternoon trading works toward the last few hours of trading.
The fall moved the pair back toward the underside of the broken channel trend line. That line comes in at 106.75. The low just reached 106.81.
Mnuchin's comments on CNBC did not rule out a trade war with China. He seemed kinda scared about that. He also seemed to be caught lying about negotiations with the Chinese. Did you get that feeling?
Yes, it was something the President talked about when he campaigned. He is the "Deal Maker" and has his way of doing things, but you wonder about the risk/reward with this fight. Not all deals are the same, and sometimes you need to do "the deal" in a different way.
In traders terminology, there are times when you don't want to trade. The risk/reward is just too great. To lessen the risk, we as traders can wait, until the price is nearer a risk defining level (so as to limit the risk).
Remember, there are bullies in the trading markets too. Many times the "Bog Boys" control and move the market. Then there are times when that bullying turns upside down and you get a Lehman, or a dot.com, or financial crisis.
The stock market can do anything over the next hour and a half or so. For traders in the USDJPY, the focus will be the 106.75. Trading against it, is an idea, but if the week end with stocks running lower, there may still be more a run lower in the USDJPY. Risk can defined though.
Another option with week coming to end for the week, is to not trade and simply wait until Monday.