USD/JPY analysis: bullish on yields, central banks' imbalances

Valeria Bednarik FXStreet

USD/JPY Current price: 112.51

The USD/JPY pair advanced for fifth consecutive day this Thursday, reaching a daily high at 112.71 during early trading hours, and after the BOJ stuck to its ultra-loose monetary policy. Following Fed's hawkish announce, including a third rate hike for this year and details on how the US Central Bank will unwind its balance sheet, the on-hold stance of Japanese policymakers highlighted the imbalances between both central banks, supportive of the pair's advance. The pair fell down to 112.13 early US session, but recovered to close near the mentioned high, following the behavior of US Treasury yields, which eased intraday, but managed to regain their post-Fed levels ahead of Wall Street's close. The pair remains biased higher according to technical readings, as in the 4 hours chart, the price continues developing well above its 100 and 200 SMAs, whilst the Momentum indicator is aiming to regain its bullish strength as the RSI indicator remains within overbought territory. The immediate resistance comes at 112.86, July 17th daily high, and an advance beyond it will open doors for a recovery up to the 114.40 price zone, where the pair topped out in May and July.

Support levels: 112.10 111.75 111.40

Resistance levels: 112.85 113.30 113.70

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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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