USD/JPY analysis: more gains expected beyond 110.25

Valeria Bednarik FXStreet

USD/JPY Current price: 110.11

The USD/JPY pair kept rallying this Tuesday, up to 110.19 and steady nearby by the end of the day, as the positive momentum in equities and yields weigh on the Japanese currency. With no relevant macroeconomic releases in any of both economies, the pair traded purely in sentiment, with the market ignoring late comments from President Trump, who complained about economic sanctions not being enough for North Korea. US indexes advanced for a second consecutive day, with the S&P reaching a new all-time high and the DJIA not far below its highest. As for US yields, the 10-year note interest surge to 2.18%, after trading as low as 2.02% last Friday while the yield on the 30-year Treasury bond was up at 2.78%. Japan will release its producer price index during the upcoming Asian session, but unless a strong deviation from market's expectations, the numbers will hardly move the yen. In the meantime the 4 hours chart shows that the price remains well above its 100 and 200 SMA, which at least have lost their bearish strength, whilst technical indicators pared gains within overbought territory, which is not enough to confirm an upcoming downward correction. The pair has anyway advanced almost straight since bottoming at 107.31 last week, which means that, despite not seen yet, a downward correction is possible, particularly if the pair is unable to advance beyond 110.25, the immediate resistance.

Support levels: 109.70 109.35 109.00

Resistance levels: 110.25 110.60 111.05

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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