|

USD/JPY Analysis: at a brink of breaking lower

USD/JPY Current Price: 107.55

  • Risk aversion gave the Japanese Yen a lift at the end of the week.
  • Japan’s National inflation steady at lows in August.
  • USD/JPY barely holding above a critical Fibonacci support at 107.45.

Fresh risk-off flows resulted in the USD/JPY pair trimming weekly gains on Friday, ending the week at 107.55. The pair retreated from a second consecutive day amid news suggesting renewed tensions between the US and China triggering demand for safe-haven assets. Chinese agricultural officers decided to suspend a visit to US farming states, while US President Trump said that he won’t be happy with less than a “complete deal.” Wall Street turned red with the news, while demand for government debt sent yields to fresh weekly lows. Meanwhile, Japan released August National Inflation on Friday, with the headline CPI resulting at 0.3%, worse than the previous 0.5%. The core reading ex-fresh food resulted at 0.5% better than the 0.4% expected but below the previous 0.6%. The country will celebrate the Autumnal Equinox Day this Monday, with local markets therefore closed.

USD/JPY short-term technical outlook

The USD/JPY pair has settled a handful of pips above a critical Fibonacci support at 107.45, the 61.8% retracement of its August decline. The pair has been developing above the level for two consecutive weeks, with approaches to it attracting buying interest. That said, a break below the level will likely imply further slides ahead. In the daily chart, the pair is now below a bearish 100 DMA but still holding above a bullish 20 SMA, while technical indicators continued retreating from overbought readings, maintaining their downward slopes but above their midlines. In the 4 hours chart, however, the bearish potential is stronger, as technical indicators head firmly south well into negative ground, while the 20 SMA began turning lower above the current level.

Support levels: 107.45 107.10 106.80  

Resistance levels: 107.80 108.15 108.40  

View Live Chart for the USD/JPY

Author

Valeria Bednarik

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

More from Valeria Bednarik
Share:

Editor's Picks

EUR/USD hovers around nine-day EMA above 1.1800

EUR/USD remains in the positive territory after registering modest gains in the previous session, trading around 1.1820 during the Asian hours on Monday. The 14-day Relative Strength Index momentum indicator at 54 is edging higher, signaling improving momentum. RSI near mid-50s keeps momentum balanced. A sustained push above 60 would firm bullish control.

GBP/USD holds medium-term bullish bias above 1.3600

The GBP/USD pair trades on a softer note around 1.3605 during the early European session on Monday. Growing expectation of the Bank of England’s interest-rate cut weighs on the Pound Sterling against the Greenback. 

Gold sticks to gains above $5,000 as China's buying and Fed rate-cut bets drive demand

Gold surges past the $5,000 psychological mark during the Asian session on Monday in reaction to the weekend data, showing that the People's Bank of China extended its buying spree for a 15th month in January. Moreover, dovish US Federal Reserve expectations and concerns about the central bank's independence drag the US Dollar lower for the second straight day, providing an additional boost to the non-yielding yellow metal. 

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels.

Weekly column: Saturn-Neptune and the end of the Dollar’s 15-year bull cycle

Tariffs are not only inflationary for a nation but also risk undermining the trust and credibility that go hand in hand with the responsibility of being the leading nation in the free world and controlling the world’s reserve currency.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.