USD/JPY Analysis: holding above 108.00, neutral
|USD/JPY Current price: 108.23
- The Japanese manufacturing sector remained in contraction territory in July.
- US Treasury yields ticked lower ahead of central banks’ announcements.
- USD/JPY trapped between Fibonacci levels, bearish below 107.90.
The USD/JPY pair has lost some ground this Wednesday but managed to end the day unchanged in the 108.20 price zone. The pair fell to 107.93 following the release of softer-than-expected US data but also following a modest down-tick in government debt yields. Speculative interest is in cautious mode ahead of central banks’ announcements, starting with the ECB this Thursday and the Fed next week. The yield on the benchmark 10-year note is ending the American session at 2.05%. Japanese data released at the beginning of the day disappointed, as the Japanese Manufacturing Index resulted in 49.6, missing the market’s expectations of 49.7. Furthermore, the Leading Economic Index for May was downwardly revised o 94.9 from 95.9, while the Coincident Index in the same period came in above the market’s expectations, with 103.4. During the upcoming Asian session, Japan will release minor data that will hardly interfere with the pair’s price.
USD/JPY short-term technical outlook
The USD/JPY pair is holding just above the 50% retracement of the July’s decline, where it also has the 100 and 200 SMA in the 4 hours chart, with the indicators still directionless. The 61.8% retracement of the same slide continues capping advances, although the relevant resistance is the 108.40 region, where the pair topped for most of the previous week. Technical indicators in the mentioned chart hold into positive ground, having bounced just modestly from their midlines but currently lacking enough directional strength. The pair is short-term neutral and would need to advance beyond the mentioned resistance area to turn positive, while bulls’ chances would likely decline on a break below 107.90.
Support levels: 107.90 107.50 107.20
Resistance levels: 108.40 108.85 109.20
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