USD/JPY Analysis: range trading exacerbated ahead of first-tier events
|USD/JPY Current price: 108.06
- Japanese Corporate Service Price Index rose by 0.7% YoY in June.
- US Durable Goods Orders seen up in June by 0.7%, core reading expected to post a modest advance.
- USD/JPY neutral, upside limited by selling interest aligned around 108.40.
The USD/JPY pair continues trading range-bound a handful of pips above the 108.00 figure. The American dollar remains strong against most major rivals, although the FX market is in wait-and-see mode ahead of the ECB’s monetary policy announcement, as latest data from the Union suggests that policymakers could announce steeper stimulus measures as soon as today. Worldwide indexes trade mixed but not far from their opening levels, while demand for government debt pushes yields marginally lower.
Japan released at the beginning of the day the June Corporate Service Price index, which rose by 0.7% YoY, much better than the 0.0% expected. Within the ECB event, the US will release weekly unemployment data, the June Goods Trade Balance, and Durable Goods Orders for the same month this last, seen up by 0.7%. The core reading, however, is expected to post a modest 0.2% advance.
USD/JPY short-term technical outlook
The USD/JPY pair continues hovering around the 50% retracement of its July’s decline, with sellers containing advances at around the next Fibonacci resistance, at 108.40. In the 4 hours chart, the 20 SMA has continued advancing, while the larger ones lack directional strength, all confined to a tight range around the current price, a sign of the absence of a clear trend. Technical indicators in the same time-frame have turned south, the Momentum heading lower and the RSI modestly down, both around their midlines, further confirming the ongoing range than anticipating an upcoming directional move.
Support levels: 107.90 107.50 107.20
Resistance levels: 108.40 108.85 109.20
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