USD/JPY analysis: bullish breakout still possible towards 116.00
|USD/JPY Current price: 113.57
The USD/JPY pair continued retreating on Friday, down from a weekly high of 114.82, level last seen in February this year. The Japanese currency was undermined by continued demand for US Treasuries, which reached multi-month highs last week. On Thursday, the 10-year yield rose to 2.447%, its highest in 17-month, while the 30-year yield rose to 3.099%, its highest in over a year. Dollar-related assets demand, however, pared ahead of Friday's US employment data, as investors took some profits out of the table ahead of the key macroeconomic report. Soft wages figures within the employment data, favor some additional gains in the JPY. Nevertheless, the pair closed higher for a fourth consecutive week, and while the rally seems overstretched, chances of a deeper downward correction are still limited according to technical readings, as in the daily chart, the technical indicators have barely managed to correct extreme overbought conditions before losing downward momentum. The pair is now battling with a major Fibonacci resistance in the 114.00 region, and renewed buying interest above it, will likely open doors for a continued advance towards the 116.00 price zone. In the 4 hours chart, technical indicators head firmly lower, with the Momentum indicator having entered bearish territory, although in the same chart, the 100 SMA continued advancing below the current level, now around 111.10.
Support levels: 113.20 112.80 112.35
Resistance levels: 114.00 114.45 114.90
View Live Chart for the USD/JPY
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