USD/JPY analysis: short-term buying interest defending 111.00

Valeria Bednarik FXStreet

USD/JPY Current price: 111.21

Yen gain on USD weakness, u-turn in Wall Street.
US Treasury yields retreated from weekly highs just modestly.

The USD/JPY pair fell to 111.11 during US trading hours, partially weighed by soft US data and partially due to plummeting equities, as despite Wall Street's soared on US-China headers, the major indexes trimmed daily gains and entered into negative territory. US Treasury yields added to the bearish case of the pair, retreating modestly from their weekly highs, although the decline there is not enough to justify USD/JPY retracement. At the beginning of the day, Japan released the third-quarter BSI large manufacturing index, which rose to 6.5, following a -3.2 previously, although below the market's expectations of 8.0. The country will release August Domestic Corporate Goods Price Index, and July Machinery Orders at the beginning of the day.

Technically, the pair faltered at the upper end of its latest range, holding above the 111.00 level and, in the 4 hours chart, above its 100 and 200 SMA, both converging within a tight 10 pips range. Technical indicators in the mentioned chart have turned sharply lower, with the RSI already within negative territory, currently at 46, supporting additional declines ahead. The 110.90 region is the immediate support, with a break below if opening doors for a steeper decline toward the 110.20/30 region.

Support levels: 110.90 110.65 110.25

Resistance levels: 111.45 111.80 112.15

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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