USD/JPY analysis: consolidates near 5-month low
|USD/JPY Current Price: 108.31
The USD/JPY pair moved slightly lower on Thursday and stretched to a fresh weekly low at 108.15, although overall it has continued to trade in horizontal manner, unable to pick up momentum. Data coming from Japan was mixed, as the BSI Large Manufacturing Conditions Index fell to -10.4 in Q2, missing the market's expectations of 4.5 and worse than the previous -7.3, while May's Tertiary Industry Index surged by 0.8%, doubling the market's expectations.
From a technical perspective, the short-term view remains slightly bearish, with 4-hour indicators showing negative slopes below their midlines and price just below the 20-SMA. The bearish tone is stronger in daily charts while USD/JPY consolidates below the 23.6% Fibo retracement of the 112.40/107.81 fall. A break above the 108.90/109.00 area, where the Fibo converges with a descending 20-day SMA could improve the short term perspective, although only a break above 110.50 would be constructive for the pair. On the downside, loss of the 107.75/80 support zone would pave the way to further declines, with 107.50 and 107.00 as next targets.
Support levels: 107.80 107.50 107.00
Resistance levels: 109.00 109.30 109.60
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