USD/JPY analysis: neutral near yearly highs
|USD/JPY Current price: 111.89
- BOJ to meet this week, no surprises expected there.
- Quiet start to the week with only Japan's markets opened in Asia.
The USD/JPY pair closed this last week as it started, flat at 111.90 having spent these last days confined to a measly 50 pips' range. The pair followed the lead of equities and yields, which saw little action these last few days. US indexes managed to recover by the end of the week, ending it little changed, while US Treasury yields trimmed gains ahead of the weekly close, moving lower Thursday on the back of strong US Retail Sales indicating solid consumption in the country. The yield on the benchmark 10-year note settled at 2.56%. Last Friday, the BOJ announced that it cut its purchases of bonds with maturities between 10 and 25 years by ¥20 billion to ¥160 billion, although policymakers repeated that is part of their strategy of keeping bonds´ rates close to zero. The Japanese macroeconomic calendar will remain scarce until next Wednesday, while the BOJ will have a monetary policy meeting on Thursday.
Despite the lack of progress, the pair remains near its yearly high, having hit 112.16 mid-last week on broad dollar's demand. The bullish case in the daily chart would be clearer on a sustainable advance beyond the mentioned level, as the pair is above all of its moving averages which anyway remained confined to a tight range, while technical indicators hold within positive ground, the Momentum easing amid the lack of progress, but the RSI steady at around 58. In the 4 hours chart, the pair is neutral, as a flat 20 SMA is limiting the upside at around 112, still holding above the larger moving averages, while technical head nowhere around their midlines.
Support levels: 111.75 111.40 111.10
Resistance levels: 112.15 112.50 112.85
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