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

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
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.


















