USD/JPY analysis: possible test of 114.40 on the makes
USD/JPY Current price: 113.71
- October's Nikkei manufacturing PMI expected above September final reading.
- Bullish potential intact as long as the price holds above Friday's close.
After gapping higher at the beginning of the day, the USD/JPY spent the rest of it in a tight consolidative range amid the absence of market's catalysts. The early advance came after PM Abe's ruling coalition has won a clear majority with more than two-thirds of Parliament's 465 seats. The results were taken by PM Abe as an indication that voters support his policies, including monetary ones, with the market understanding that negative rates will remain for longer, as inflation gives no signs of picking up. During the upcoming Asian session, market's attention will be on the preliminary Nikkei manufacturing PMI for October, expected at 53.1 from previous 52.9. The pair posted a daily high of 114.09 before establishing a handful of pips below the 114.00 mark, retaining anyway its positive stance according to technical readings in the 4 hours chart, as the price is far above marginally bullish 100 and 200 SMAs, whilst technical indicators hold near their daily highs, aiming to resume their advances. The opening gap was pretty much filled, but Friday's close at 113.43 is now a critical support, as to maintain the bullish stance, the pair should bounce quickly in the case of a retracement towards the level. To the upside, a break above 114.09 should lead to an advance towards the 114.40 region, a major static resistance, as the pair topped around it in May and July.
Support levels: 113.45 113.10 112.70
Resistance levels: 114.10 114.40 114.85
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.
