USD/JPY analysis: little room for gains with yields subdued

Valeria Bednarik FXStreet

USD/JPY Current price: 111.33

The USD/JPY pair ended the week unchanged at 111.33, contained by selling interest aligned around 112.00. The JPY advanced on Friday, supported by easing US Treasury yields and better-than-expected inflation in Japan, as data showed that core inflation rose in April by 0.3% when compared to a year earlier, a two-year high, on the back of rising energy costs. Far from the 2% BOJ's target, the news at least is enough to suggest that the Bank is no longer in the extending easing path. The technical picture is bearish, despite the pair trading within a 100 pips' weekly range, given that in the daily chart, it settled below its 100 and 200 DMAs, while technical indicators head lower within negative territory, although with the RSI still above its monthly low. In the 4 hours chart, the price is also developing below its moving averages that anyway lack directional strength, whilst technical indicators have partially recovered within negative territory before losing directional strength, also indicating the absence of buying interest. The pair bottomed this week at 110.23, and a steeper decline could be expected on a break below it.

Support levels: 111.10 110.60 110.25

Resistance levels: 111.65 112.00 112.45

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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