USD/JPY analysis: dollar gains on US debt-ceiling relief

Valeria Bednarik FXStreet

USD/JPY Current price: 109.32

The USD/JPY pair fell to a fresh weekly low of 108.45 late Asia, changing course abruptly in the US afternoon to settle above 109.30, on the back of news indicating that the US Congress agreed on Harvey aid, and extending the debt ceiling to avoid defaulting in December. The news brought relief to the poor greenback, hit by different fronts these last few days, although across the FX board, the yen seems to be the most sensitive to the headline. Japan will release its coincident and leading indexes during the upcoming session, although market will likely remain cautious ahead of the ECB announcement later on the day. Technically, the recovery remains corrective, as despite the almost 100 pips' advance, the pair remains below its moving averages in the 4 hours chart, also below the 23.6% retracement of the July/August decline, this last around 109.75. Technical indicators in the mentioned chart have bounced sharply from oversold readings, but remain within negative territory, overall indicating that the upward potential is limited at least as long as the price remains below the mentioned Fibonacci resistance.

Support levels: 108.60 108.10 107.70

Resistance levels: 109.00 109.35 109.80

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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