USD/JPY analysis: consolidative phase continues
|USD/JPY Current price: 109.80
- Fears of slowing economic growth had little effect on safe-haven yen.
- Wall Street offered negative hints for the pair, decline could continue in Asia.
The USD/JPY pair continued trading uneventfully a handful of pips below the 110.00 figure, with a spike beyond the level having been quickly reversed. For the day, the pair posted modest losses, weighed by the soft tone of government bond yields and equities. Fears of slower global economic growth take their toll on financial markets this Thursday, following EU's Commission and BOE's downgrades of their growth forecasts. US Treasury yields were under pressure ever since the day started, with the benchmark yield for the 10-year note down to 2.66%. Japan's preliminary December Leading Economic Index came in at 97.9 as expected, although below the previous 99.1. The Coincident Index decreased to 102.3 from the previous 102.9. This Friday, Japan will release several macroeconomic reports, none of them utterly relevant. Overall Household Spending and the trade balance for December, would be the most relevant, both related to economic growth.
The pair offers a short-term neutral stance according to readings in the 4 hours chart, as it keeps developing above its 100 and 200 SMA, with the shortest advancing modestly above the larger one, both around the 109.40 level. The Momentum indicator in the mentioned chart lacks directional strength around its 100 level, while the RSI bounced from its mid-line, heading higher now at around 54. Bulls need to push the price above 110.16 to beat bears and be able to push the price higher, while the key to the downside continues being the 109.05 Fibonacci support.
Support levels: 109.40 109.05 108.65
Resistance levels: 110.15 110.45 110.90
View Live Chart for the USD/JPY
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