USD/JPY analysis: pressuring lows, waiting for US inflation

USD/JPY Current price: 111.10

  • USD/JPY resumed decline after correction stalled below 112.00.
  • US inflation and retail sales data could send the pair to 110.00.

The USD/JPY pair managed to correct some of its Wednesday's slump during, advancing up to 111.87 during Asian trading hours, from where it later resumed its decline, to reach a fresh multi-month low near 111.00. US Treasury yields eased modestly after Chinese authorities denied that they recommended to slow or halt purchases of US bonds, but remain sharply up for the week, with the 10-year note yield at 2.56%. US stocks reversed their previous declines and reached all-time highs ahead of the close, but worst-than-expected US figures offset the positive mood and kept the USD/JPY pair in the bearish path. Japanese macroeconomic data continued offering encouraging signs, as the leading index hit its strongest level in almost four years in November, up to 108.5 from October 106.5, while the coincident index surged to 118.1 from 116.4 in the same month. The country will release its November trade figures during the upcoming Asian session, but focus will center on US inflation and retail sales figures later in the day.  The pair maintains its bearish tone according to technical readings in the 4 hours chart, as it holds well below its 100 and 200 SMAs, with the shortest gaining traction downward above the larger, and with technical indicators resuming their declines near oversold readings. An immediate support comes at  111.83, November low, with a break below this last, opening doors for an extension toward the 110.00 figure.

Support levels:   110.85 110.50 110.10

Resistance levels: 111.60 112.00 112.40  

View Live Chart for the USD/JPY

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