USD/JPY analysis: back to square one, clings to 108.50
|USD/JPY Current Price: 108.49
The USD/JPY continued to trade horizontally, closing the day at its starting point, despite broad-based Dollar strength. The pair fell during the first half of the day but slowly recovered ground during the New York session, returning to square one around 108.50. In the data front, Japan released the Domestic Corporate Goods Price Index for May, which fell by 0.1% when compared to a month earlier but rose 0.7% YoY. The country also released April Machinery Orders, which brought some relief amid bouncing nicely, up 5.2% MoM and by 2.5% YoY.
Technical perspective has turned broadly neutral in 4-hour chart, with price hovering around the 20-SMA and indicators flat at mid-ranges. However, from a wider view, the pair retains the bearish tone, with RSI having corrected from oversold readings in daily charts and price developing below 20,100 and 200-day SMAs. However, USD/JPY would need a break below the 107.75/80 support zone to extend the decline to 107.50 and then 107.00. On the other hand, the pair needs to at least regain the 100-SMA in 4H, currently around 109.00, to get some relief and attempt a steeper recovery to 109.60.
Support levels: 107.80 107.50 107.00
Resistance levels: 109.00 109.30 109.60
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