USD/JPY analysis: break through 111.50 exposes the 110.00 price zone
|USD/JPY Current price: 112.08
- Stocks and bond-yields leading the way higher for the JPY.
- Scarce Japanese macroeconomic calendar this week.
The USD/JPY plunged on Friday to close the week at 112.08, its lowest settlement since October 16th, despite US housing data released on Friday was much better-than-expected. According to the official release, Housing starts soared by 13.7% in October, while Building Permits rose 5.9%, a one-year high. Tax reform jitters, weighing on Wall Street, offset the positive headline, as after Thursday's recovery, US equities turned back south, ending the week in the red, while longer-term US Treasury yields eased, as the 2-year note yield surged to its highest in nine-year, ending the day up at 1.72%, as the 10-year note yield settled lower at 2.35%. Japan's macroeconomic calendar will be quite light, releasing its trade balance data at the beginning of the week, and the Nikkei manufacturing index on Thursday. Technical readings in the daily chart present a strong bearish stance, as indicators head south almost vertically within negative territory, as the price nears the 100 and 200 DMAs, both converging around 111.50, a critical support for the upcoming sessions, as below it, the downward momentum will likely accelerate. In the 4 hours chart, the price has extended far below its moving averages, with the 100 SMA gaining downward strength above the larger, while technical indicators maintain their strong bearish slopes near oversold readings, in line with the longer-term perspective.
Support levels: 111.95 111.50 111.10
Resistance levels: 112.30 112.60 113.00
View Live Chart for the USD/JPY
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