USD/JPY analysis: bulls taking one step forward
USD/JPY Current price: 110.84
- US Treasury yields trimmed early losses, helping the USD/JPY hold near 111.00.
- Sour sentiment related to trade-war remains the main market motor.
The USD/JPY pair advanced for a fifth consecutive day, reaching 111.05, its highest since late May, before retreating to spend the day in the 110.70/80 area. Weighing on the Asian currency was the Tankan report, which showed that business confidence in Japan slipped for a second consecutive quarter, down to 21 from the previous 24. The Nikkei manufacturing PMI for June resulted as expected at 53.0, down from the previous 53.1. Despite the sour tone of worldwide equities, US Treasury yields managed to trim early losses and recover up to Friday's closing levels, which alongside with stronger-than-expected US data helped to keep the pair afloat at the end of the day. Technically, the 4 hours chart shows that the pair is holding above its 100 and 200 SMA, with the shortest aiming modestly higher in the 110.20 region. In the mentioned chart, the Momentum indicator eases in positive territory while the RSI holds directionless around 58, leaving a neutral-to-bullish stance in the short-term. A break through the mentioned daily high should lead to a test of 111.39, May monthly high, ahead of the 111.70/80 region, while below 110.55, a bearish extension could be expected for this Tuesday.
Support levels: 110.55 110.15 109.90
Resistance levels: 111.05 111.40 111.75
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.
