USD/JPY: sellers capping advances around 111.20
|USD/JPY Current price: 110.94
- Better market mood pushed the yen lower, but USD/JPY still in bears' hands.
- Equities struggling to retain the early positive momentum limit the upside short-term.
Easing risk aversion has helped the USD/JPY pair recover up to 111.14, although the pair retreated from such high, now struggling to retain the 111.00 mark. The dollar, in the meantime, remains the strongest across the FX board, not far from its recent yearly highs against its high-yielding rivals. The Turkish Lira has recovered some ground against its American rival, the main reason why equities pared their recent bleeding. The Nikkei advanced over 500 points, trimming Monday's losses and leading to a positive opening in Europe, although indexes in the region are barely holding in the green, despite some positive figures just released. Further underpinning the pair are US Treasury yields, which are also up, with the benchmark 10-year note yield now flirting with 2.90%.
Japanese data released overnight was mixed, as Industrial Production, fell by less than expected in June, dropping 1.8% MoM vs. a forecasted decline of 2.1%, while yearly basis, the figure resulted at -0.9% vs. market's expectations of -5.0%. Capacity Utilization, however, posted a large 2.2% drop, against a flat reading forecasted. The US will release some minor figures today, including the NFIB Business Optimism Index for July and Import and Export prices for the same month.
The 4 hours chart for the pair shows that selling interest appeared once the price neared its 100 SMA, reinforcing the static resistance area around the 111.20 level. In the mentioned chart, technical indicators lost upward momentum after entering positive territory, indicating that selling interest remains strong, willing to add on advances. The pair would need to advance beyond 111.50 to dent bears' determination. Below the 110.50/60 price zone, on the other hand, the negative momentum will likely accelerate, with the weekly low at 110.10 back at sight.
Support levels: 110.55 110.10 109.80
Resistance levels: 111.20 111.50 111.90
View Live Chart for the USD/JPY
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