USD/JPY analysis: downward pressure prevails, despite risk sentiment improving

Valeria Bednarik FXStreet

USD/JPY Current price: 111.11

The USD/JPY pair advanced modestly at the beginning of the day, following the release of Japanese trade balance figures, which missed expectations but anyway showed economic progress in the country. Exports were up in April by 7.5%, missing expectations of 7.8%, while imports rose by 15.1%, surpassing market's estimates of 14.8%. The final surplus in the mentioned month, shrank to ¥481.7B. The early advance was contained by selling interest around 111.60, with the pair later trapped between the positive tone of equities and dollar's weakness, falling down to 110.92, but regaining the 111.00 level ahead of the close. During the upcoming Asian session, the country will release the final revisions of March leading indexes, alongside with the May preliminary Markit PMI, expected at 52.9 from a previously revised 52.7. The pair settled a couple of pips below a key static resistance, the 111.20 region where in the 4 hours chart, the 200 SMA converges with the 50% retracement of the latest bullish run. In the same chart, the Momentum indicator has turned south around its 100 level, while the RSI indicator consolidates around 40, all of which supports additional declines on another downward acceleration below the 111.00 figure.

Support levels: 111.00 110.50 109.90

Resistance levels: 111.60 112.00 112.45

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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