USD/JPY analysis: correcting after first attempt of taking the 113.00 level

Valeria Bednarik FXStreet

USD/JPY Current price: 112.77

Japan trade balance expected to post a surplus of ¥534.2B in June.
USD/JPY pulled back from a multi-month high of 113.13.

The USD/JPY pair reached a fresh multi-month high of 113.13 during the Asian session, beginning to ease afterward to turn negative for the day following US softer-than-expected housing data. Equities were mostly up in Europe and the US, while Treasury yields saw little action and held near weekly highs, preventing the pair from easing further. Japan's trade balance for June will be out early Thursday, expected to post a surplus of ¥534.2B from May's slide of ¥-580.5B. Imports are expected to have increased by 5.3% while exports are forecasted to be up by 7.0%. The pair holds near its previous July high, and above the small figure broken yesterday, which suggest that bulls are still in control of the pair. Technical readings in the 4 hours chart, support further gains ahead, as the pair is developing well above its 100 and 200 SMA, which extended their upward slopes, while technical indicators stabilized well into positive territory, the RSI after correcting overbought conditions. Dollar's latest decline seems corrective and the pair still has room to extend its advance beyond the 113.00 figure, although a stepper downward move could come on a break below the 112.50/60 region, the immediate support area.

Support levels: 112.60 112.15 111.80

Resistance levels: 113.00 113.40 113.85

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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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