USD/JPY analysis: bulls have more chances once 109.20 gets cleared
|USD/JPY Current price: 108.93
- Better-than-expected US banks results gave USD/JPY a lift.
- Long-term, the bearish case is strong amid poor fundamental background.
The USD/JPY pair posted a modest intraday advance, nearing the 109.00 figure late US session. Most of its intraday gains were obtained during US trading hours amid Wall Street's strength, as Bank of America and Goldman Sachs reported better-than-expected results in their fourth-quarter profit. Asian and European equities, on the other hand, spent the day hesitating around their opening levels, weighed by growth and political concerns. Additional support came from US Treasury yields, which rose to flirt with last week's high, as the benchmark yield for the 10-year note hit 2.73%.
Japanese data released at the beginning of the day fueled concerns about global growth, as most numbers were disappointing. According to official figures, the Domestic Corporate Goods Price Index was down in December by 0.6% MoM, posting a modest yearly advance of 0.8%. Machinery Orders in November remained flat, failing to grow, while when compared to a year early, were up 0.8% better than the market's forecast but far below the previous 4.5%. Finally, the Tertiary Industry Index was down 0.3% in December. BOJ's Kuroda is due to speak, but within the inauguration of the G-20 meeting, not expected to say something relevant for the market.
The USD/JPY pair advances near a key resistance area, not far below the 61.8% retracement of its latest monthly decline at 109.05. The 4 hours chart shows that the 100 SMA stands a handful of pips above this last, while technical indicators grind higher well into positive ground, somehow favoring additional gains without confirming them, as for such to happen, the pair would need to surpass 109.20, now the immediate resistance. Once above it, the longer-term downward pressure will ease, with little in the way toward the 110.00 figure.
Support levels: 108.65 108.30 107.90
Resistance levels: 109.20 109.50 109.85
View Live Chart for the USD/JPY
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.