USD/JPY Current Price: 108.65
- Market’s trading on sentiment, this last, determined by Brexit headlines.
- Japan’s National Inflation seen falling in September, BOJ may be forced to act.
- USD/JPY at risk of extending its slide sub-108.00 on deteriorating sentiment.
The USD/JPY pair has extended its weekly advance to 108.93, although it traded mute for most of the first half of the day, as prevalent risk appetite kept investors away from the pair. It ended up falling during the American session, amid fading optimism about the newest Brexit deal passing the Parliament and mixed US data. Adding to the pair’s sour tone, Wall Street trimmed most of its early gains ahead of the close, although US Treasury yields moved in the opposite direction, limiting USD/JPY slide.
Japan will release September National inflation this Friday, foreseen at 0.4%, while the core reading, excluding fresh food, is expected to come in at 0.3% from 0.5% previously. Such low readings would fuel speculation that the Bank of Japan will announce more monetary stimulus in the upcoming months.
USD/JPY short-term technical outlook
The USD/JPY pair has retreated within range, now struggling to retain the bullish bias, according to the 4 hours chart, as the pair has pierced a bullish 20 SMA, now struggling around it. Technical indicators in the mentioned chart are posting modest bounces from their midlines, falling short of dismissing additional slides. Should risk aversion resume, the pair may well lose the 108.00 level, which will increase the risk of a steeper downward corrective movement. Gains, at the time being, are unlikely, given broad dollar’s weakness.
Support levels: 108.45 108.10 107.85
Resistance levels: 109.00 109.35 109.60
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