USD/JPY Analysis: holding at the upper end of its latest range
|USD/JPY Current Price: 107.17
- Risk appetite kept demand for the Japanese yen subdued.
- Japanese Q2 GDP came as expected at 0.3%, up by 1.3% YoY.
- USD/JPY with chances of resuming its advance once beyond 107.45 a Fibonacci resistance.
The USD/JPY pair has spent the day consolidating at the higher end of its latest range, hovering around the 107.00 figure throughout the day. The main driver for the pair was sentiment, as the market’s positive mood sent US Treasury yields to fresh two-week highs, weighing on the safe-haven yen. The lack of demand for the dollar limited the advance.
Japan released its Q2 Gross Domestic Product, which was confirmed at 0.3% as expected, having little effect on the market. The annualized reading also matched the market’s forecast with 1.3%. The country also released the July Trade Balance, with a deficit of ¥-74.5B. Also, the Eco Watchers Survey showed that the business outlook continued to deteriorate in August, with the index down to 39.7 from 44.3. This Tuesday, the country has a light macroeconomic calendar, as it will only release August Money Supply.
USD/JPY short-term technical outlook
The USD/JPY pair is trading near a daily high of 107.19, maintaining a short-term positive stance, although below a critical Fibonacci resistance at 107.45, the 61.8% retracement of the August decline. In the 4 hours chart, the pair held above its moving averages, with the 20 SMA advancing below the larger ones, skewing the risk to the upside. The RSI indicator keeps heading north, currently at 66, while the Momentum indicator diverges lower, holding anyway within positive levels.
Support levels: 106.90 106.65 106.30
Resistance levels: 107.45 107.80 108.05
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