USD/JPY Analysis: bulls targeting 109.31

Valeria Bednarik FXStreet

USD/JPY Current Price: 108.84

China’s Foreign Ministry said that they are “on the same page” that the US.
Japanese data keeps signaling slowing economic growth at the end of Q3.
USD/JPY bullish on sentiment, heading toward August highs.

The USD/JPY pair has reached 108.89 this Tuesday, a level last seen early August as the Japanese currency got dumped on risk-on. Renewed hopes that the UK and the EU will reach a deal on Brexit this week boosted the market’s sentiment. Meanwhile, the Chinese Foreign Ministry said that the country will speed up orders for American agricultural products, adding that both countries are “on the same page and have no difference in the stance on reaching a trade deal,” adding to the positive sentiment. US Treasury yields rose, with the benchmark 10-year Treasury yield hitting 1.77%, and Wall Street surging to fresh monthly highs.

Japan data came in mixed, as the August Tertiary Industry Index rose by 0.4% much better than the -0.2% expected. Industrial Production in the same month, declined as expected by 1.2% MoM and by 4.7% YoY, while Capacity Utilization plummeted by 2.9%. The country won’t release relevant data this Wednesday.

USD/JPY short-term technical outlook

The USD/JPY pair is up for a fifth consecutive day and a couple of pips below the mentioned daily high, with scope to continue recovering toward August monthly high at 109.31. In the 4 hours chart, the pair met buyers around a sharply bullish 20 SMA, which keeps advancing beyond the larger ones. The RSI indicator consolidates at around 76, while the Momentum retreats within positive levels, rather reflecting decreased demand by the end of the day, than suggesting an upcoming slide.

Support levels: 108.60 108.20 107.95

Resistance levels: 109.00 109.35 109.60

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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