USD/JPY Current price: 113.22
The USD/JPY pair closed the week with modest gains around 113.20, down on Friday after failing to regain the 114.00 level. Risk appetite was not enough to fuel the pair, with bulls probably disappointed by the outcome of the Abe-Trump meeting, as both leaders shook hands and praise one another, but said nothing about a possible trade deal or on how the relationship between the two countries will continue. Despite Wall Street closed at record highs for a second consecutive day on hopes for an upcoming tax cut and recovering US Treasury yields, the USD/JPY pair closed the week with a lower low and a lower high, somehow suggesting that yen's rally is not yet over. Risk aversion may re-surge with the weekly opening, as over the weekend, North Korea fired an unidentified ballistic missile, triggering condemnatory comments from both, Abe and Trump, with the first saying that missile tests "can absolutely not be tolerated." Technically, the daily chart shows that the pair was unable to break below a bullish 100 DMA, currently at 111.85, while the 38.2% retracement of the latest bullish run stands at 111.95, providing a major support for the upcoming days. In the same chart, however, technical indicators have lost upward strength right below their mid-lines, and the RSI is slowly turning south, leaning the scale towards the downside. In the 4 hours chart, the price is struggling with a bearish 100 SMA, while the RSI indicator pulled back from overbought readings, now heading lower around 54, whilst the Momentum indicator maintains its bullish strength near overbought readings.
Support levels: 112.85 112.40 111.90
Resistance levels: 113.60 114.00 114.55
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