USD/JPY: lower lows favor additional declines ahead
|USD/JPY Current price: 107.07
- USD/JPY still stuck around 107.00, key support at 106.20.
- Japanese Industrial Production's growth decelerated in February.
The USD/JPY pair is still unable to find a way, although this Tuesday it trades lower in range. The pair fell to 106.87 on broad dollar's weakness, now recovering some ground. Data coming from Japan was soft, as Industrial Production grew at a slower-than-expected pace in February, flat for the month and up by 1.6% YoY, well below the expected 2.3% advance. The pair remains afloat amid the positive tone of worldwide equities, but demand for the greenback is restricted. Yields remain steady around Monday's close, providing no clues to the pair.
Ahead of US data releases, the short-term picture for the pair is bearish, as despite developing above its 100 and 200 SMA, technical indicators maintain their downward slopes below their mid-lines. The 100 SMA offers an immediate dynamic support around 106.60, and once broken, the pair has room to extend its decline toward 106.20. The lower lows daily basis favor a new leg lower, moreover considering that the market is unwilling to jump into the dollar. The upside seems quite messy, as the pair has multiple intraday highs between 107.50 and 107.90, and there's no background for a rally through this last.
Support levels: 106.90 106.60 06.25
Resistance levels: 107.50 0 107.90 108.20
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