USD/JPY analysis: ready to challenge 110.00

Valeria Bednarik FXStreet

USD/JPY Current price: 110.38

Kuroda pledged to maintain ultra-loose policy, but speculative interest doesn't buy it.
USD/JPY at fresh 4-month lows, 110.10, 109.80 and then the abyss.

The USD/JPY pair plunged to a fresh 4-month low of 110.33, level reached during the US afternoon, as the yen's appreciation continued. The Japanese currency got a boost from the technical breakout of the 110.80 price zone, where the pair bottomed last November, extending its slide afterward despite thin market conditions. Earlier on the day, BOJ's Kuroda offered a speech, reiterating that the central bank is determined to maintain its QQE with yield-curve control, but also offered an optimistic outlook of the local economy, spurring speculation that the BOJ could start trimming easing sooner than later, particularly after drastically reducing its bond-buying earlier this month. During the upcoming Asian session, Japan will release its all industry activity index, expected at 0.4% in November from 0.3% in October. The bearish trend keeps gaining traction, as the pair develops further below its 100 and 200 DMAs, while in the daily chart, technical indicators accelerate their slides, entering oversold territory. In the 4 hours chart, the 100 SMA crossed below the 200 SMA both in the 112.50 region, while the RSI indicator heads south around 27 as the Momentum consolidated within bearish territory, all of which supports a test of 110.10 the next short-term support.

Support levels: 110.10 109.80 109.40

Resistance levels: 110.85 111.20 111.60

View Live Chart for the USD/JPY

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.

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