USD/JPY analysis: bulls with little reasons to go on
|USD/JPY Current price: 113.30
- US equities reversed early gains, Treasury yields also gave up.
- Japanese data keeps disappointing, capping yen's advance.
The USD/JPY pair extended its advance to a fresh weekly high of 113.46 but finally ended the day flat around 113.30. The pair got a boost from an uptick in Treasury yields and rising equities during the first half of the day, but that positive momentum faded in the US afternoon, with the yield on the benchmark 10-year note peaking at 2.89% before trimming daily gains to finish at around 2.86%, barely up for the day. Japanese data released at the beginning of the day was quite disappointing, as the Q4 BSI Large Manufacturing Index resulted at 5.5, shrinking from the previous 6.5, while Machine Tool Orders plunged 16.8% according to November preliminary estimates, following a 0.7% slide in October. Japan will release this Wednesday, November the Domestic Corporate Goods Price Index, seen down 0.1% MoM, and the Tertiary Industry Index for the same month, seen improving by 0.9%. October Machinery Orders will also be out, seen posting a whopping 10.5% advance after an 18.3% decline in the previous month.
The pair heads into the Asian opening with a modestly positive tone, as technical indicators are developing within positive ground and near daily highs, although without directional strength, while the pair holds a handful of pips above its 100 and 200 SMA, both confined to a tight 10 pips' range and directionless. The positive tone is being reinforced by the fact that the pair has bounced sharply from its 100 DMA after a second attempt to break lower. Buying interest is now aligned at around 113.00, with the bearish potential set to increase only on a break below 112.55.
Support levels: 112.90 112.55 112.20
Resistance levels: 113.40 113.75 114.00
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