USD/JPY analysis: new leg higher still likely, despite FOMC uncertainty

USD/JPY Current price: 104.16

The USD/JPY pair traded as high as 104.47 this Wednesday, the highest since July 29th, and ahead of the release of the FOMC Minutes. Data coming from Japan at the beginning of the day, came better-than-expected as core  machine orders dropped 2.2% in August and when compared to July, beating expectations of a 5.5% decline. Also, machine orders rose 11.6% year-on-year, exceeding expectations of a 6.5% advance. The pair retreated after the release of the latest FOMC Minutes which left a sour taste on traders' mouth, as its clear the lack of consensus among US policy makers. Still holding above 104.00, the short term picture for the pair suggests that the downward move may extend, at least in corrective mode, as in the 1 hour chart, technical indicators have turned sharply lower from overbought readings, although the price remains well above its 100 and 200 SMAs, with the shortest around 103.60. In the 4 hours chart, technical indicators have also lost upward strength, but are far from presenting a bearish stance, while the price is well above its moving averages that slowly grind higher, supporting the case of a downward corrective move ahead of a new leg higher.

Support levels: 104.00 103.60 103.20

Resistance levels: 104.50 104.95 105.35

View Live Chart for the USD/JPY

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.