USD/JPY analysis: critical longer-term support at 111.10

Valeria Bednarik FXStreet

USD/JPY Current price: 111.83

The USD/JPY pair ended Friday at 111.83, breaking the base of the range that contained it for the previous three weeks, although not by much. Soft US September inflation hit the greenback on Friday, as despite the headline CPI rose by 0.5% in the month, the core rate rose just 0.1% against 0.2% expected. Positive, but not surprising retail sales weren't enough to offset concerns over future Fed's monetary policy decisions. US Treasury yields plunged with the news, with the 10-year note benchmark ending the week at 2.28% and the yield for the 30-year note at 2.81%, both four basis points below Thursday's levels. The daily chart indicates that the pair settled below the 23.6% retracement of its September rally, but also that technical indicators entered negative territory with sharp downward slopes. The 100 and 200 DMAs are converging horizontally between the current price and the 38.2% retracement of the previous month's rally, this last at 111.10. Shorter term, and according to the 4 hours chart, the pair presents a neutral-to-bearish stance, now developing below its 100 SMA, but above the 200 SMA, while technical indicators head marginally lower within negative territory.

Support levels: 111.50 111.10 110.70

Resistance levels: 112.25 112.60 113.00

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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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