USD/JPY analysis: correcting lower, but still bullish

Valeria Bednarik FXStreet

USD/JPY Current price: 112.32

Japan kick starts the week with a holiday, anticipating reduced volumes.
Strong upward momentum in Wall Street underpins the USD/JPY pair.

The USD/JPY pair peaked at 112.79 at the end of the week, its highest since last January, before easing partially to end Friday at 112.32. Friday's decline was moderated when compared to previous weekly gains, as the pair held firmly above the 112.00 figure. The positive mood among equities' traders have kept the pair afloat, despite US Treasury yields underperformed, slipping after US Consumer Sentiment fell to its lowest in six months. The yield on the benchmark 10-year Treasury note settled for the week at 2.829%, pretty much unchanged weekly basis. Japan will start the week with a holiday, which may see limited volumes during the first session of the day. In the daily chart, the pair is well above its moving averages, but with the 100 DMA advancing slowly below the 200 DMA. Technical indicators have pulled lower from extreme levels, but remain within overbought readings, suggesting a possible downward corrective movement ahead, but without confirming it, and without denying the dominant bullish trend. In the 4 hours chart, technical indicators also corrected extreme overbought conditions but lost downward strength well above their midlines, as the price remains far above its moving averages, in line with the longer term perspective.

Support levels: 112.15 111.80 111.40

Resistance levels: 112.60 113.00 113.40

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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