USD/JPY analysis: recovery fell short of breaking relevant levels

USD/JPY Current price: 111.23

USD broad's strength and easing risk aversion helped the pair bounce.
Short-term bullish as long as the positive sentiment persists.

The Japanese currency eased as fears eased, with the USD/JPY pair surging above the 111.00 figure in the US afternoon, backed by Wall Street's recovery and firmer US Treasury yields. The yield on the benchmark 10-year Treasury note was higher, at 2.89%, hovering around this last for most of the US session. Data coming from Japan was mixed, as Industrial Production fell by less than expected in June, dropping 1.8% MoM vs. a forecasted decline of 2.1%, while yearly basis, the figure resulted at -0.9% vs. market's expectations of -5.0%. Capacity Utilization, however, posted a 2.2% drop, against a flat reading forecasted. The Japanese macroeconomic calendar will remain empty this Wednesday. The pair's appreciation fell short of breaking a relevant level, as risk-aversion may have eased, but political turmoil worldwide prevails. In the 4 hours chart, the pair is currently struggling around a directionless 100 SMA with the 200 SMA also heading nowhere a few pips above the current level, although technical indicators maintain their upward slopes at fresh weekly highs and well into positive territory, somehow anticipating another leg higher for this Wednesday.

Support levels: 110.50 110.20 109.80

Resistance levels: 111.30 111.60 111.90

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