USD/JPY Analysis: bearish momentum likely to accelerate below 107.70

Valeria Bednarik FXStreet

USD/JPY Current price: 108.09

Japanese trade balance seen posting a surplus of ¥420.0B in June.
Dismal US data and mounting trade concerns weighed on the pair.
USD/JPY failed attempt to recover opens the door for a steeper decline.

The USD/JPY pair has finished the day in the red, just above a daily low of 108.00. The pair has spent the first half of the day consolidating just below the weekly high set Tuesday at 108.37, with bulls capitulating after disappointing US housing data. The Japanese currency was also benefited by renewed concerns about the trade war between the US and China, which fueled demand for safe-haven assets. US Government bonds fell sharply, with the yield on the benchmark 10-year Treasury note falling to 2.05%. Japan will open its macroeconomic week this Wednesday, by releasing June´s Trade Balance, seen posting a surplus of ¥420.0B vs. the previous deficit of ¥-968.3B.

USD/JPY short-term technical outlook

The USD/JPY pair is heading into the Asian opening with an increased bearish potential, as it broke below the 23.6% retracement of its latest daily slide, after meeting sellers around the 50% retracement of the same slump. In the 4 hours chart, the pair is back below converging moving averages, while technical indicators turned south, the Momentum struggling with its 100 level and the RSI currently at 43. The failed attempt to recover will likely discourage bulls, exposing the pair to a steeper decline.

Support levels: 107.70 107.35 106.90

Resistance levels: 108.40 108.80 109.15

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.

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

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.