USD/JPY Analysis: recovery may continue once above 107.50

Valeria Bednarik FXStreet

USD/JPY Current Price: 107.45

US Treasury yields extended their advance 10-year note yield hit 1.69%.
Japan to release the BSI Large Manufacturing Conditions Index for Q3.
USD/JPY a test of the 108.00 region seems likely in the upcoming sessions.

The USD/JPY has extended its weekly advance to 107.49, its highest since August 1, approaching this last by the end of the US session, as US indexes bounced from intraday lows, trimming most of their daily losses. Demand for safe-haven assets remained soft, leading US government debt yields higher, with that on the benchmark 10-year note hitting a daily high of 1.69%, amid hopes the US and China will soon resume trade talks. A scarce macroeconomic calendar in Japan and the US exacerbated the usual range trading. This Wednesday, Japan will only release the BSI Large Manufacturing Conditions Index for Q3.

USD/JPY short-term technical outlook

The USD/JPY pair is trading near its daily high, battling with a major Fibonacci resistance, the 61.8% retracement of its August decline. In the short-term, and according to the 4 hours chart, the pair still has chances of extending its advance, as it continues developing above all of its moving averages, with the 20 SMA extending its advance beyond the 100 and 200 SMA. The Momentum indicator extends its recovery from near neutral levels, while the RSI continues consolidating around 70.

Support levels: 106.90 106.65 106.30

Resistance levels: 107.50 107.80 108.05

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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