USD/JPY analysis: firmly bearish as risk aversion persists

Valeria Bednarik FXStreet

USD/JPY Current price: 108.70

The USD/JPY pair settled at 108.70, not far from this month low of 108.59, neither from the yearly one, set last April at 108.12. Yen's daily advance was backed by softer equities worldwide, and a down-tick in US T-yields, as risk aversion prevailed. The US and South Korea started their annual defensive military exercises this Monday, getting an infuriated response from North Korea, which once again menaced with a nuclear attack, not just on Guam, but also on Hawaii and the rest of the US territory. Japan won't release any macroeconomic reading during the upcoming Asian session, which means that sentiment will keep on leading the way, whilst movements will probably remain limited. From a technical point of view, the 4 hours chart supports additional declines ahead, as the price remains well below bearish 100 and 200 SMAs, whilst technical indicators hover within negative territory, although with limited bearish strength. Below 108.59, the low set last week, the pair has room to extend its decline down to 108.12, the mentioned yearly low.

Support levels: 108.55 108.15 107.70

Resistance levels: 109.10 109.50 109.90

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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