USD/JPY analysis: bearish below 110.50
|USD/JPY Current price: 110.86
The USD/JPY pair reached a 2-month low this past week at 108.80, led by US yields plunging to fresh 2017 lows ahead of FOMC's monetary policy announcement. The 10-year Treasury note fell down to 2.138% on Wednesday, recovering afterwards to end the week at 2.16%. Helping the pair recovery was BOJ's decision, as the Japanese Central Bank kept rates unchanged at -0.1% as expected and maintained QQE with Yield Curve Control as expected, offering a confident stance an upgrading its consumption outlook. The pair advanced up to 111.41 with the news, but settled some 50 pips lower as US data released on the last day of the week disappointed, curving demand for the USD. The risk for the pair remains towards the downside, given that in the daily chart, the price remains below its 100 and 200 SMAs, with the shortest heading south below the largest, whilst technical indicators lost upward strength and turned flat within neutral territory. Additionally, Friday's advance was rejected around the 50% retracement of the latest bullish run. In the shorter term, and according to the 4 hours chart, the price is trapped between its moving averages, both heading south and with the 100 SMA converging with a Fibonacci support at 110.50, while technical indicators head north within positive territory, limiting chance of a downward move as long as the price holds above the mentioned support. In the case of a move below it, the risk will turn towards the downside for the upcoming sessions.
Support levels: 110.50 110.10 109.70
Resistance levels: 111.30 111.70 112.00
View Live Chart for the USD/JPY
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