USD/JPY analysis: risk aversion helped the yen, but still within familiar ranges
USD/JPY Current price: 112.38
The USD/JPY pair closed the day in the red, but off its daily low of 111.98, with the yen on demand at the beginning of the day, as uncertainty on how things will unfold in Spain kept investors on their toes. There were no big news coming from the US this Tuesday, with attention focused on Wednesday's FOMC Minutes. As for yields, bonds surged on a risk averse environment, with the yield of the 10-year note benchmark down to 2.34%, adding to yen's gains at the beginning of the day. The 4 hours chart shows that the price bounced from a key support, the 23.6% retracement of its September rally, but ended the day below its 100 SMA, whist technical indicators have managed to recover some ground, but hold within bearish territory, leaning the scale towards the downside. The pair is anyway 20 pips away from its comfort zone around 112.50, diminishing the relevance of the bearish extension towards fresh 2-week lows. If the price however, is unable to recover beyond 112.50 and attempts another bearish run, will likely end up breaking lower, towards the 111.60 price zone.
Support levels: 112.00 111.65 111.20
Resistance levels: 112.65 113.00 113.45
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.
