USD/JPY analysis: bullish trend not at risk, but further declines expected

Valeria Bednarik FXStreet

USD/JPY Current price: 112.41

Dollar's decline sent USD/JPY to fresh weekly lows.
Japanese National inflation coming in the next Asian session.

The USD/JPY pair traded as high at 113.17, a new high since last January, but shed roughly 100 pips from such high on the back of falling US yields and equities, affected by comments from US President Trump suggesting that Fed's rate hikes are hurting the economic progress of the country. The yield on the benchmark 10-year Treasury note slipped to 2.84% after being as high as 2.90% earlier in the day. US indexes were struggling to recover some ground, but bulls gave up, and the three major indexes turned negative for the day. Japan's data released at the beginning of the day was mixed, as the trade balance printed a larger than expected surplus of ¥721.4B in June, but imports fell from 14.0% in the previous month, to 2.5%. The country will release National June inflation during the upcoming session, seen ticking modestly higher from the previous month, up to 0.8% from the previous 0.7%. The pair settled around 112.40 after nearing the 112.00 level, with an increased downward potential, now that the pair is back below the 112.60 level. In the 4 hours chart, technical indicators head lower within bearish territory with strong downward slopes, while the price remains far above bullish moving averages, which means that the longer term bullish trend is not yet at risk, although further downward corrective movements can't be disregarded.

Support levels: 112.05 111.80 111.40

Resistance levels: 112.60 113.00 113.40

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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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