USD/JPY analysis: bulls will still have to wait

Valeria Bednarik FXStreet

USD/JPY Current price: 106.67

Political woes determined the pair's direction ever since the day started.
USD/JPY to resume its bearish trend below 106.00.

The USD/JPY pair trimmed half of its early gains and settled around 106.65 by the end of the day. The Japanese yen came under selling pressure at the beginning of the day, hurt by escalating tensions surrounding the scandal of the sale of state-land that involves PM Abe and FM Aso. Adding to the bullish case of the pair were local equities, which shrug off the negative tone of Wall Street and edged sharply higher. Japanese data released at the beginning of the day disappointed, as the Domestic Corporate Goods Price Index came in at 2.5% YoY, below market's expectations of 2.6%. Additionally, the Tertiary Industry Index fell by more than expected in February printing -0.6% against the expected -0.2%. The country will release its January Machinery Orders during the upcoming Asian session, seen improving from the previous slump. In the meantime, the pair failed once again to sustain gains beyond the 107.00 figure, pressured during the US afternoon by dollar's weakness post-Trump decision to fire another of his advisors, and the soft tone of US equities. Technically, the risk remains skewed toward the downside according to the 4 hours chart, as the pair returned to consolidate around a horizontal 100 SMA, having stalled its recovery below a bearish 20 SMA, and while technical indicators retreated. The Momentum entered negative territory, while the RSI hovers around 52, both in neutral territory at the time being.

Support levels: 106.35 106.00 105.70

Resistance levels: 107.10 107.45 107.80

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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