USD/JPY analysis: bearish momentum to accelerate below 110.82

Valeria Bednarik FXStreet

USD/JPY Current price: 111.19

Japan and US PMIs taking center stage.
Equities poised to extend their declines, favoring the safe-haven yen.

The USD/JPY pair spent the day trading uneventfully around 111.20 after hitting a two-month low of 111.06 early Asia on the back of dollar's sell-off post-FOMC Minutes. Japan and the US celebrated a Thanksgiving holiday this Thursday, further exacerbating the range in the pair, as no fresh clues came from any of those economies. European equities held around their opening levels, closing the day marginally lower, somehow suggesting that market's mood remains depressed, anticipating some further yen gains for this Friday. During the upcoming Asian session, Japan will see the release of the preliminary November Nikkei manufacturing PMI, expected at 52.6 from previous 52.8, while US Markit PMIs will see the light later on the day. Technically, the risk remains towards the downside, as the price settled below its 100 and 200 DMAs for the first time in over two months, while daily indicators maintain their bearish slopes within negative territory. Shorter term, and according to the 4 hours chart, the scale also leans toward the downside, as the pair is developing below its 100 and 200 SMAs, with the shortest nearing the larger from above, as technical indicators consolidate within extreme oversold readings, with no signs of downward exhaustion. As mentioned on a previous update, the pair has an unfilled weekly opening gap at 110.82 from mid-September, now the immediate support. A break below it should result in an acceleration of the bearish trend, with scope then to test the 110.00 level.

Support levels: 110.80 110.35 110.00

Resistance levels: 111.60 112.00 112.40

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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