USD/JPY analysis: Near weekly highs, but losing upward strength

Valeria Bednarik FXStreet

USD/JPY Current price: 113.89

Nikkei Manufacturing PMI down to 52.2 in October weighed on JPY.
Daily recovery stalled below 114.00, limited by the lack of progress in US-yields.

The USD/JPY pair settled at 113.89, trimming most of it Monday losses as the pair fell to 113.23 early Asia, following the soft tone of US equities. The pair recovered ground on the back of rising US Treasury yields, as the 10-year benchmark hit 2.41% ahead of Wall Street's opening, but there was no follow-through after the bell, nor in yields, neither in the USD/JPY pair. The Nikkei Flash Japan Manufacturing Purchasing Managers' Index, or PMI, released this Tuesday, fell to 52.5 from September's 52.9, a sign that the sector lost momentum at the beginning of Q4. The pair is still unable to surpass the high set at the beginning of the week as a result of the Japanese election at 114.09, and from a technical point of view, the bullish potential lost momentum, as in the 4 hours chart, the price remains above its moving averages, but technical indicators failed to surpass previous highs, currently easing within positive territory. Given that there are no news scheduled in Japan, the pair will likely keep following the lead of equities, with US Durable Goods Orders being a probable directional catalyst for this Wednesday.

Support levels: 113.45 113.10 112.70

Resistance levels: 114.10 114.40 114.85

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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