USD/JPY analysis: one step closer to a bearish breakout

USD/JPY Current price: 112.16

The USD/JPY pair closed the day lower, but after trading within a tight 30 pips range for most of the day. Positive US data released this Thursday was not enough to push the pair past the 112.50 region, while a slump in US Treasury yields after an auction and by the end of the day, sent the pair lower. The 10-year note yield fell to 2.32% after closing the previous day at 2.34%, whilst the 30-year note benchmark settled at 2.85% from previous 2.88%. Data coming from Japan at the beginning of the day showed that the Corporate Goods Price Index rose by 0.3% on the month in September, posting also an annualized gain of 3%, both of which matched analyst forecasts, and were slightly better than August numbers. The pair has been confined to a tight range for almost three weeks, but over these last few days, bears have been increasing the pressure, with the pair barely holding above 112.00, the 23.6% retracement of its September low/October high rally. The 4 hours chart shows that selling interest has been limiting advances around the 100 SMA, currently around the mentioned 112.50, while the Momentum indicator continues lacking directional strength within neutral territory, although the RSI indicator gains downward strength within negative territory, now around 40, supporting a bearish extension for the upcoming session, moreover on a break below the mentioned support.

Support levels: 112.00 111.65 111.20

Resistance levels: 112.65 113.00 113.45

View Live Chart for the USD/JPY

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