USD/JPY analysis: correcting higher, but risk leans towards the downside
|USD/JPY Current price: 113.14
- Risk-off pauses, but not over.
- US Treasury yields leading the way for the JPY.
The USD/JPY pair recovered from a 4-week low of 112.47, anyway barely above the 113.00 level by the end of the US session. The early decline was driven by a sharp decline in worldwide equities and bond yields, while the pair corrected higher alongside with them after things get calmer in the American afternoon. Nevertheless, bond yields are sharply lower daily basis, with the 10-year note benchmark around 2.35% after bottoming at 2.33% and closing yesterday at 2.38%. At the beginning of the day, the market knew that Japan's industrial production declined less than initially estimated in September, down 1.0% monthly basis vs. a 1.1% previous estimate. The country's calendar will remain quite light this Thursday, with no relevant events scheduled for the rest of the week. From a technical point of view, the risk remains towards the downside, as in the 4 hours chart the price is below its 100 and 200 SMAs for the first time in over a month and a half, with the largest now acting as immediate resistance around 113.25. Indicators in the mentioned chart have bounced from oversold readings but lost upward strength within bearish territory, supporting a bearish extension for the upcoming sessions.
Support levels: 112.90 112.50 112.10
Resistance levels: 113.25 113.60 114.05
View Live Chart for the USD/JPY
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