USD/JPY analysis: modest advance, still in the way to break above 110.00

Valeria Bednarik FXStreet

USD/JPY Current price: 109.57

Soft US data and plummeting Wall Street not enough to discourage bulls.
Japanese solid data overshadowed by BOJ's on-hold stance.

The USD/JPY pair extended its latest advance by a few pips, as poor US data and plummeting Wall Street was just enough to cap the rally of the greenback against yen. The pair traded as high as 109.78, with investors cautious when trading safe-haven assets ahead of Fed's decision this Wednesday. Helping the pair were US Treasury yields, as the 10-year note benchmark touched 2.98%, while the 2-year note yield climbed to 2.51%, its highest since September 2008. Earlier in the day, data coming from Japan was encouraging, as the April Nikkei Manufacturing PMI beating expectations with 53.8, but given that the BOJ decision to maintain stimulus is fresh in investors' memory, the positive figure had no direct effect on the pair. The pair retains its positive stance according to technical readings in the 4 hours chart, as it holds far above bullish moving averages, while the Momentum indicator heads north at weekly highs, and the RSI retreats modestly after testing 70. Overall, a break of 110.00 seems likely with a hawkish Fed, with steady gains above it favoring an advance up to 111.20 the next big static resistance level.

Support levels: 108.95 108.60 108.25

Resistance levels: 109.50 109.90 110.20

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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