USD/JPY analysis: depressed near 111.20 support

Valeria Bednarik FXStreet

USD/JPY Current price: 111.37

Japanese yen holds on to daily gains ahead of a quiet Asian session.
USD/JPY next relevant support at 110.80, April monthly low.

The USD/JPY pair recovered just modestly from a 3-week low of 111.23, finishing the day at around 111.35. The Japanese currency appreciated during the Asian session amid safe-haven demand following softer-than-expected Chinese business growth data, as the official Manufacturing and Non-Manufacturing PMI came in below expected. The Yen was also supported by broad dollar's weakness, as speculative interest dumped the American currency ahead of the US Federal Reserve´s decision on monetary policy this Wednesday. The greenback´s attempt to recover ground during the American session was short-lived, with the pair having spent the last trading session at the lower end of its daily range. The Japanese macroeconomic calendar had nothing to offer and will remain empty this Wednesday.

The USD/JPY pair is at risk of extending its decline, as its finishing the day below its 200 DMA for the first time since April 10. Shorter term, and according to the 4 hours chart, the pair is bearish as it is developing below all of its moving averages and with the 20 SMA already below the 100 SMA maintaining its bearish slope. The Momentum indicator in the mentioned chart lacks directional strength within negative levels, while the RSI indicator is barely bouncing from oversold readings, not enough to interfere with the pair´s downward potential. A break below 111.20 exposes 110.80 April's monthly low, while below this last the bearish momentum will likely accelerate.

Support levels: 111.20 110.80 110.50

Resistance levels: 111.45 111.70 112.00

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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