USD/JPY analysis: recovering ground, bulls still rule
|USD/JPY Current price: 113.70
- US Treasury yields and Wall Street´s recovery underpinned the pair during the American afternoon.
- Japan Nikkei Services PMI for September expected at 51.8 from the previous 51.5
The USD/JPY pair fell to 113.52 but recovered half of its intraday losses in the last US session, to settle around 113.70. The yen appreciated during the first half of the day amid ruling risk aversion, although gains against the greenback were limited, as the USD is also perceived as a safe-haven. The pair recovered in the American session alongside with US Treasury yields, which recovered the ground lost in pre-opening trading, and as US indexes managed to hit fresh highs. The yield for the benchmark 10-year note settled around 3.06%. Japan will release during the upcoming Asian session the Nikkei Services PMI for September, expected at 51.8 from the previous 51.5.
The 4 hours chart for the pair shows that the Momentum indicator retreated sharply from overbought readings, now nearing its midline, while the RSI indicator is recovering, also after correcting from extreme levels and currently at 60, rather reflecting the limited buying interest seen earlier in the day than supporting a bearish case. In the same chart, the 100 and 200 SMA maintain their strong upward slopes below the current level, with the 100 SMA currently at around 112.50. The pair remains on track to extend its advance toward 114.40/50, a major static resistance area.
Support levels: 113.55 113.20 113.80
Resistance levels: 114.05 114.40 114.75
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