USD/JPY: bearish consolidations around 111.00 handle ahead of US data
|The USD/JPY pair now seems to have entered a bearish consolidation phase and was seen oscillating within 20-pips narrow trading range around the 111.00 handle.
Against the backdrop of political uncertainty stemming out of the upcoming UK general election and escalating geopolitical tensions in the Korean peninsula, renewed concerns over Greek bailout aggravated global risk aversion trade and boosted the Japanese Yen's safe-haven appeal.
However, a modest recovery in the European equity markets helped the pair to bounce off session lows, albeit retracing US treasury bond and a fresh wave of greenback selling interest further collaborated towards keeping a lid on the pair's recovery move.
In fact, the key US Dollar Index has now reversed majority of its early gains as traders now look forward to today's US macro data for some fresh impetus.
The US economic docket features the releases of Core PCE Price Index, Personal Income / Spending data and CB's Consumer Confidence Index for May.
Technical outlook
Omkar Godbole, Analyst and Editor at FXStreet writes: "Pair’s failure around 112.00 levels last week, followed by a break below 111.00 levels has established a falling top formation on the daily chart. The RSI has failed to get back above 50.00 (into bullish territory) and is now sloping downwards. The pair thus appears on track to test 110.23 (May 18 low) and 110.00 levels. A daily close below 110.00 would establish a falling bottom formation and shall open doors for a sell-off to 108.13 (Apr 17 low). On the higher side, only a daily close above 111.85 (falling channel resistance) would signal bearish invalidation."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.