USD/JPY analysis: consolidative phase extends, downward risk limited

Valeria Bednarik FXStreet

USD/JPY Current price: 113.58

The USD/JPY pair fell down to 112.86 at the beginning of the day, but recovered up to 114.77 afterwards, trading mostly on market's sentiment. The safe-haven yen was on demand early Asia, following news that Italian PM Renzi resigned after losing the referendum held in Italy this Sunday, to modify the local constitution. Mr. Renzi proposed a reduction of the number of politicians within the houses, to speed up the law-making process in the country, in order to boost the depressed economy. The economic calendar will remain light in Japan, which means that the pair will likely continue trading on sentiment. The pair has erased all of its daily gains as US stocks retreated from their highs ahead of the close, settling around 113.50. In the 1 hour chart, the pair has broken below its 100 SMA, but bounced twice from a bullish 200 SMA ever since the day started, now at 113.15, the immediate support. In the mentioned chart, the Momentum indicator is flat around its 100 level, while the RSI indicator hovers around 41. In the 4 hours chart, technical indicators head south within bearish territory, but the 100 and 200 SMAs have extended their advances below the current level, while the price keeps hovering around the 114.00 level, indicating limited selling interest around the pair.

Support levels: 113.15 112.80 112.35

Resistance levels: 114.00 114.45 114.90

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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