USD/JPY analysis: modest bounce doesn't modify bearish trend

Valeria Bednarik FXStreet

USD/JPY Current price: 109.19

The USD/JPY pair fell down to 108.72 on Friday, its lowest since mid April, to end the day pretty much flat at 109.19, having, however, set a lower low and a lower high daily basis, in line with the dominant bearish trend. Risk aversion backed the yen's rally, which appreciated alongside with government bonds, resulting in US Treasury yields falling to their lowest since late June. The 10-year note benchmark traded as low as 2.18%, to settle at 2.19%, while the 30-year note interest ended at 2.79%, unchanged for the day. Japan will release its Q2 preliminary GDP figures at the beginning of the week, with the economy expected to have grew by 0.6%, doubling Q1 0.3%. In the meantime, technical readings in the daily chart support a downward extension, as the Momentum indicator bounced modestly within bearish territory, whilst the RSI indicator consolidates around 31, and the price remains below its 100 and 200 SMAs. In the 4 hours chart, technical indicators have lost upward strength within negative territory and after correcting oversold conditions, whilst the price remains far below bearish moving averages. 108.80, June low, is the immediate support, with renewed selling pressure below it opening doors for a test of the year low at 108.12.

Support levels: 108.80 108.45 108.10

Resistance levels: 110.15 110.40 110.70

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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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