USD/JPY analysis: dollar modestly up, upward potential limited

Valeria Bednarik FXStreet

USD/JPY Current price: 111.44

USD/JPY advanced just modestly as a scarce macroeconomic calendar kept investors sidelined.
Mixed signals coming from peripheral markets, as equities raise by yields retreat.

The USD/JPY pair added around 15 pips in tight Monday trading, settling by the end of the US session around the key 111.40 level. There were no macroeconomic releases from Japan or the US affecting the pair, with the advance due to persistent dollar's strength, but without follow-through. European equities closed marginally lower, although US one retained the positive tone seen by the end of the week, partially underpinning the pair. As for US Treasury yields, they were slightly lower daily basis with the yield on the benchmark 10-year note stabilizing around 2.93% after closing at 2.95% last Friday. Early Tuesday, Japan will release Overall Household Spending, and June preliminary Leading Economic and Coincident indexes. Technically, the pair is short-term neutral, as in the 4 hours chart, it remains confined between its 100 and 200 SMA, both lacking directional strength, while technical indicators turned flat around their midlines. The immediate resistance now is the 111.60 region, the 38.2% retracement of the 113.17/110.58 decline, with a recovery above the level leaning the scale toward the upside for the upcoming sessions.

Support levels: 111.10 110.90 110.55

Resistance levels: 111.60 111.90 112.20

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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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