USD/JPY analysis: losses trimmed, but bearish trend intact

Valeria Bednarik FXStreet

USD/JPY Current price: 110.70

The USD/JPY pair recovered in the American session from a daily low of 110.26, ending the day marginally lower around 110.70. The early decline, led by risk aversion at the beginning of the day, was reverted during the American afternoon, after US President Donald Trump said that he is going to do a "major haircut" on the Dodd Frank regulation, "so that the banks can lend money to people that need it." US stocks trimmed early losses, while Treasury yields recovered the ground lost, to end the day flat. Japan will release its Markit services PMI for March during the upcoming session, with the previous being at 51.3. From a technical point of view, the pair retains its bearish tone, given that in the 4 hours chart, the price is well below a sharply bearish 100 SMA, now converging with a major Fibonacci resistance at 112.00, whilst technical indicators have bounced from oversold readings, but hold far below their mid-lines. The pair has a major support comes at 109.90, the 50% retracement of the late 2016 monthly rally, with a break below it probably triggering a sell-off in the pair towards 107.90 the 61.8% retracement of the same advance.

Support levels: 110.95 110.50 110.10

Resistance levels: 111.60 112.00 112.50

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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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