USD/JPY analysis: retreating to gain bullish impulse
USD/JPY Current price: 111.79
- Easing Treasury yields and Wall Street's poor performance weighed on the pair.
- Japan Leading Index and Coincident Index, both for February, foreseen steepening their latest declines.
The USD/JPY pair fell to 111.61, surpassing its previous weekly low by a couple of pips, bouncing just modestly from the level ahead of Wall Street's close. The absence of macroeconomic releases coming from Japan exacerbated range trading at the beginning of the day, with the later decline a consequence of a weaker dollar following soft US data and easing government bond yields, with the benchmark yield for the 10-year note down to 2.69%. Adding some pressure on the pair, Wall Street extended its bearish rout. The upcoming Asian session will bring Japanese Leading and Coincident indexes for February, seen decreasing further from the previous month.
The pair has been confined to a tight 50 pips range ever since the week started, and may correct lower before finally being able to break higher. The key will be the 111.00 level, as, if it breaks below it the risk will be then toward the downside. For the short-term and according to the 4 hours chart, the pair offers a neutral stance, still trading above bullish moving averages, and with technical indicators lacking directional strength around their mid-lines.
Support levels: 111.60 111.30 111.00
Resistance levels: 112.20 112.50 112.90
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.
