USD/JPY Analysis: Holding on higher ground, with upside potential limited

USD/JPY Current price: 108.80
- Brexit taking center stage amid a deal clinched ahead of EU summit.
- Dollar in trouble amid demand for high-yielding assets.
- USD/JPY neutral-to-bullish in the short term, bearish below 108.50.
The financial world is all about a Brexit deal this Thursday, with high-yielding assets on the run and those considered safe-havens under pressure. The USD/JPY pair is the one lacking action, stuck just below the 109.00 figure, as not the dollar, neither the Japanese currency are a matter of interest at the time being.
According to the latest headlines, EU’s and UK’s negotiators agreed to a deal that Juncker and Johnson will present to the European Union today within the EU Summit. The deal has DUP’s support, which means that there are more chances that the UK will leave the Union with a deal.
There were no macroeconomic releases in Japan that could affect the pair, but the US has some figures scheduled, the weekly unemployment claims, housing data and some minor regional indexes. Given that US data disappointed on Wednesday, weighing on the USD, there are chances that another batch of negative figures could lead to some losses in the pair.
USD/JPY short-term technical outlook
The USD/JPY pair is neutral-to-bullish, as the pair is consolidating at highs, after hitting earlier in the day 108.93. In the 4-hour chart, the pair remains above all of its moving averages, with the 20 SMA providing dynamic support at around 108.55, where it also bottomed yesterday. Technical indicators in the mentioned chart hold within positive levels, the Momentum lacking directional strength and the RSI retreating modestly from overbought levels. The key resistance area comes at 109.30, where the pair topped in August.
Support levels: 108.50 108.10 107.80
Resistance levels: 109.00 109.35 109.70
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.


















