USD/JPY: losing upward momentum, but bearish below 111.10
|USD/JPY Current price: 111.45
- Solid Wall Street's performance partially offset fears, risk aversion on pause.
- USD/JPY rally fading at the upper end of its latest range.
The USD/JPY pair eased from its Tuesday's peak at 111.64 as the sour market mood that dominated the markets receded following a solid Wall Street's performance. The pair trades not far from the mentioned high, driven by a mild retracement in US Treasury yields, as the benchmark for the 10-year note eased to 2.96% from 2.97%. Equities in Asia are marginally lower, while European ones are posting modest intraday gains, that lead US futures to extend their advances in pre-opening trading. Japan released the third-quarter BSI large manufacturing index, which rose to 6.5, following a -3.2 previously, although below the market's expectations of 8.0.
The US will release today August PPI, with the ex-food & energy figures seen increasing 0.2% MoM and 2.7% YoY. FOMC Brainard will speak later in the day. As usual lately, trade war and political headlines will set the tone for currencies.
The 4 hours chart for the pair shows that the upward momentum is fading at the upper end of its latest range, but also that the pair keeps holding above its 100 and 200 SMA, with the shortest crossing above the larger one, while technical indicators ease from overbought levels but remain well above their midlines. The short-term negative tone will likely increase on a break below 111.10, while only above 111.80 the pair will be poised to resume its advance.
Support levels: 111.10 110.85 110.40
Resistance levels: 111.80 112.15 112.45
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