USD/JPY analysis: bounced contained by key resistance
|USD/JPY Current price: 110.80
- Japan's National inflation foreseen at 0.3% YoY in February.
- Improved marked mood and better-than-expected US data underpinned the pair.
The USD/JPY pair fell to a fresh March low of 110.29 at the beginning of the day, following the latest Fed announcement. Japan observed a bank holiday this Thursday, with no activity in the Nikkei, although other local indexes fell, while US Treasury yields fell to levels last seen over a year ago, given the safe-haven currency a lift. Government bond yields remained under pressure with the yield on the benchmark 10-year note falling to 2.50%, but Wall Street posted a nice comeback, with the three major indexes up for the day, helping USD/JPY to recover ground, alongside better-than-expected US data. Japan is set to publish February National inflation during the upcoming session, seen up by 0.3% YoY, and the preliminary Nikkei Manufacturing PMI, previously at 48.9.
The pair recovered up to 110.95 in the US session, and the 4 hours chart shows that it was unable to recover ground above its 200 SMA, overall retaining its bearish stance, as, in the same chart, technical indicators lost upward momentum within negative levels after correcting extreme oversold conditions. The pair could extend its advance once above 111.00, particularly if Asian equities follow the lead of the US ones. Still, and in the wider perspective, the risk remains skewed to the downside, only changing to bullish if the price surpasses 112.13, the yearly high.
Support levels: 110.45 110.10 109.80
Resistance levels: 111.00 111.45 111.80
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