USD/JPY analysis: poised to challenge the 112.00 threshold

USD/JPY Current price: 112.68

The USD/JPY pair plunged on Friday to settle at 112.68, its lowest in two weeks, as early week dollar's weakness was exacerbated by poor US data. On Friday, the preliminary University of Michigan consumer confidence index rose to 97.6 for March from 96.3 in February, beating consensus, but within the report, the 1-year inflation expectations declined to 2.4% from  previous 2.7% while the 5-year inflation expectations figure declined to 2.2% from 2.5%, the lowest reading in the survey’s history, and further fueling the idea that the Fed will take its time to raise rates further. A decline in US-Treasury yields also dented the pair, with the 10-year note shedding around 0.10% weekly basis, to end it at 2.50%. The pair is poised to extend its decline from a technical point of view, given that in the daily chart, it settled below its 100 SMA, now losing upward strength a few pips below 140.50, a major Fibonacci resistance, whilst technical indicators head sharply lower within bearish territory. In the 4 hours chart, the pair accelerated its decline after meeting continued selling interest on attempts to surpass a horizontal 200 SMA at 113.50, whilst technical indicators have moderated their bearish momentum, but consolidate within oversold readings, indicating further slides are likely towards 112.00.

Support levels: 112.50 112.10 111.65

Resistance levels: 113.05 113.50 114.00

View Live Chart for the USD/JPY

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