USD/JPY analysis: back to square one on US equities weakness

Valeria Bednarik FXStreet

USD/JPY Current price: 113.66

Positive US macroeconomic data failed to boosted the pair.
Decline seems corrective for now, key support at 112.75.

The USD/JPY pair surged to a three-month high of 114.23 at the beginning of the day, as US Treasury yields soared ahead of Wall Street's opening, whilst the US released a better-than-expected US Durable Goods Orders report for the month of September. The yield for the 10-year note surged to 2.47%, its highest in seven months, also before the opening bell, backing the pair's rally. Nevertheless, and despite the US added another positive macroeconomic release, the pair begun retreating, as Wall Street fell on the back of worse-than-expected earnings reports. With little in the Japanese macroeconomic calendar ahead, the pair is trading with a short-term bearish stance, according to the 4 hours chart, as technical indicators head south, with the Momentum already below its mid-line and the RSI indicator at 52, both supporting additional declines ahead, moreover on a break below 113.23 the weekly low. In the mentioned chart, however, the price remains well above bullish 100 and 200 SMAs, suggesting that an upcoming decline could be considered corrective, as long as it holds above the 100 SMA, now at 112.75.

Support levels: 113.20 112.75 112.40

Resistance levels: 114.05 114.40 114.85

View Live Chart for the USD/JPY

Author

Valeria Bednarik

FXStreet

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.

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