USD/JPY Analysis: holding on to modest gains

Valeria Bednarik FXStreet

USD/JPY Current Price: 106.62

Japanese exports to China declined by 9.3% YoY in July.
USD/JPY consolidating a few pis below a critical Fibonacci resistance.

The USD/JPY pair is trading in the 106.60 price zone by the end of the American session, modestly up for the day. The pair topped at 106.69, briefly surpassing the 38.2% retracement of the latest daily decline, a level that has capped the upside throughout the past week. The advance was backed by a better market mood on the back of positive comments from US President Trump about the trade relationship with China. At the beginning of the day, Japan released its Trade Balance, which posted a larger-than-expected deficit of ¥-249.6B in July, as exports dropped by 1.6% while imports were down 1.2%. According to the official release, exports to China were down 9.3%, when compared to July 2018, a consequence of the trade war. Japan’s macroeconomic calendar will remain empty this Tuesday.

USD/JPY short-term technical outlook

The USD/JPY pair hast spent the last American session consolidating gains in the 106.50/60 region, maintaining a neutral stance in the short term, as, in the 4 hours chart, the 20 SMA has turned flat below the current level, while the 100 SMA maintains its bearish slope, approaching the mentioned Fibonacci resistance. Technical indicators in the mentioned time-frame remain within positive levels, lacking directional strength and off their daily highs.

Support levels: 106.05 105.60 105.25

Resistance levels: 106.65 106.95 107.20

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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