USD/JPY Analysis: lifeless consolidation continues

Valeria Bednarik FXStreet

USD/JPY Current Price: 106.40

Japan National CPI seen up by 0.5% YoY in July.
USD/JPY confined to familiar levels despite plenty of possible catalysts.

The USD/JPY pair has continued trading lifeless within familiar levels. It surged to 106.64 during the Asian session, as the American Dollar rose on the back of FOMC Meeting’s Minutes. The pair, however, was unable to overcome the 106.65 Fibonacci resistance that has been capping advances for over a week. Japan data disappointed, as the August preliminary Nikkei Manufacturing PMI came in at 49.5, better than the previous 49.4 although below the market’s forecast of 49.8. Furthermore, June All Industry Activity Index declined by 0.8% when compared to the previous month, worse than the -0.7% anticipated. Worse than expected US data and a temporal inversion of the US yield curve weren’t able to move the pair, which bottomed for the day at 106.24. Japan will release July National Inflation, seen up by a modest 0.5% YoY.

USD/JPY short-term technical outlook

The USD/JPY pair has been trapped between Fibonacci levels since last Thursday, below 106.65, the 38.2% retracement of the 109.31/105.4 decline and above 106.05, the 23.6% retracement of the same slide. In the 4 hours chart, technical indicators continue hovering around their midlines, without directional strength, as the price stands around its 20 and 100 SMA. The risk is skewed to the downside, although the pair still needs to break below 106.05 to be able to extend the decline.

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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